Facebook’s parent company Meta to buy Giphy’s appeal case opens this week, experts say the odds are unlikely

Beijing time on the evening of April 25th, according to reports, Facebook parent company Meta will try this week to overturn a controversial ruling related to the Giphy deal.

Back in May 2020, Meta announced the acquisition of Giphy, a GIF image search engine, for $315 million. Although Meta has completed the deal, at the end of November last year, the UK antitrust regulator, the Competition and Markets Authority (CMA), blocked the deal, requiring Meta to sell Giphy.

Meta called the ruling “extremely unreasonable.” To this end, Meta filed an appeal on December 23 last year, asking the UK Competition Appeal Tribunal (CAT) to reassess the CMA’s ruling to overturn it.

The UK Competition Appeals Tribunal will hear the case this week for a four-day hearing. Industry insiders say the case has the potential to become the UK’s biggest antitrust dispute this year. The case is the first time global regulators have forced a major tech company to unwind a completed deal and underscores the CMA’s growing interest in intervening in digital markets and mergers and acquisitions.

In the appeal document, Meta contested the CMA’s ruling on six fronts. Meta said the CMA failed to adequately assess its commitment to ensuring that Giphy continued to offer its services to rivals such as Snapchat and TikTok on the same terms. In addition, Meta said the CMA’s decision was procedurally flawed.

Industry insiders said that for the appeal,Low chance of CMA losing case.becauseThe UK Competition Appeal Tribunal will only consider the legality of the CMA ruling, not its investigation itself.

“It’s very difficult to overturn this decision by the CMA,” said Tom Smith, a competition lawyer at the law firm Geradin Partners, who previously served at the CMA.

A spokesman for Meta declined to comment ahead of the hearing.

A spokesman for the CMA said: “By requiring Meta to sell Giphy, we are promoting competition and innovation in digital advertising and ensuring that our competitors have access to a competitive Giphy service. We will vigorously defend this decision.”

The CMA is primarily concerned that the deal will hurt other social networking sites, saying Meta could use the acquisition to deny other social media platforms access to Giphy’s GIFs.