Meta’s failed Giphy transaction could end Big Tech spending

However, this concern formed only half of the CMA debate. While warning about reduced competition between social media platforms, regulators also warned about market implications that do not yet exist. According to CMA, Giphy could rival Facebook in the UK advertising market if it wasn’t purchased. “Before the merger, Giphy launched an innovative advertising service and was considering expanding to countries other than the United States, including the United Kingdom,” Watchdog said in a statement to promote the brand by Pepsi and Dunkin Donuts. I quoted the GIF I created in.

“This is an interesting point,” says Peter Broadhurst, a competitive partner at law firm Crowell & Moring. He calls CMA “expansionists” that it targets transactions involving two US companies. “Giphy wasn’t making money in the UK,” he says. “But the CMA found evidence that it might have tried to sell the ad in the UK at some point in the future, rather than the particularly strong evidence of that sound, and felt” that’s enough. ” The decision also shows. Bold by Brexit, UK regulators are ready to claim themselves at the global antitrust stage, Pepper says. “In the UK, there is a rare system that gives CMA a very broad authority to intervene in many transactions, especially following Brexit, which is used to accommodate small transactions.”

This decision is not a complete surprise either. CMA has been conducting a detailed investigation into the acquisition of Giphy since April 2021. In September 2021, Facebook responded to the preliminary findings of the investigation by questioning the UK’s jurisdiction over transactions in a document issued by the UK Government. “In this case, the facts are simple,” Facebook said. “Facebook and Giphy are not competing in the UK and there is no overlap in the related commercial activities that raise competitive concerns.”

Mr. Tyler believes that Meta is currently facing a growth trend in which mergers are reported by countries with which the transaction has no significant relationship. She added that the European Union and its member states are also beginning to consider cross-border transactions, noting that Austria introduced the acquisition of customer service platform Kustomer to the European Commission in March 2021. doing. Forcing a merger is difficult, and as a result, many other enforcers are looking at ways to prevent market harm, “says Tyler.

It’s not uncommon for regulators in one country to block transactions that are rooted in another country, but it’s not unprecedented. In 2001, the European Union blocked the acquisition of another US conglomerate, Honeywell, proposed by Boston-based General Electric. In 2018, a Chinese review shattered US semiconductor company Qualcomm’s plan to swallow Dutch rival NXP. In May 2021, airline software companies Saber and Farelogix failed to appeal the CMA’s decision to prevent the merger, even though Farelogix had no UK customers or sales.

Meta’s failed Giphy transaction could end Big Tech spending

Source link Meta’s failed Giphy transaction could end Big Tech spending

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