Facebook’s parent company, Meta Platforms Inc., has agreed to sell Giphy Inc., an animated GIF image search and sharing platform, after it was again ordered to do so by the U.K. Competition and Markets Authority.

Meta, then known as Facebook, initially purchased Giphy in 2020 for $315 million to boost its social media platform’s appeal to younger audiences. The company hoped that adding the new company would improve its ability to offer animated GIF stickers in Instagram stories and direct messages would increase the appeal of its platform.

However, the acquisition quickly attracted the attention of the CMA, which opened an antitrust inquiry into the purchase because of the relative sizes of the two businesses in the social media market. The primary concern of the watchdog was that it would limit the availability of animated GIFs to competitors in the market, which would close opportunities to smaller social media platforms. Facebook rejected those claims.

It took the watchdog about a year to order the company to unwind its purchase of Giphy in November of 2021. Meta appealed the decision shortly thereafter, saying that improvements to Giphy would bring more opportunities to the industry at large and it would keep the platform open to everyone.

Today, the CMA released its final report following the Competition Appeal Tribunal’s judgment on the matter, calling again for the sale of Giphy.

“This deal would significantly reduce competition in two markets,” said Stuart McIntosh, chair of the independent inquiry group carrying out the remittal investigation. “It has already resulted in the removal of a potential challenger in the U.K. display ad market, while also giving Meta the ability to further increase its substantial market power in social media.”

The CMA concluded that through Giphy, Meta would increase its already significant market share, which its review found to make up 73% of user time on social media in the U.K., and would require Giphy customers such as Tiktok, Twitter and Snapchat to provide even more data from U.K. users in order to access Giphy GIFs.

Meta said it was disappointed with the order, but would not appeal the decision any further. The company said that it would work with the CMA to sell Giphy.

Image: Giphy