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Facebook United Kingdom Technology

UK Regulators Order Facebook-owner Meta To Sell Giphy (axios.com) 27

Posted by msmash from the tussle-continues dept.
Regulators in the U.K. on Tuesday said they have directed Facebook parent company Meta to sell Giphy after finding "the takeover could reduce competition between social media platforms and increase Facebook's already significant market power." From a report: Facebook agreed to buy Giphy in May of last year for an estimated price of $400 million. The deal almost immediately invited antitrust scrutiny, given the increased attention to Facebook's growing market power.

In a statement, the U.K.'s competition and markets authority concluded that the deal would be anticompetitive because Facebook could theoretically increase market power by "denying or limiting other platforms' access to Giphy GIFs," or "changing the terms of access," to its GIFs for competitive sites. Regulators also determined that the deal was uncompetitive because it shut down Giphy's advertising business, therefore eliminating Giphy's competition to Facebook's ad business. As a result, regulators said Facebook "will also be required to reinstate the innovative advertising services that Giphy offered before the merger."
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UK Regulators Order Facebook-owner Meta To Sell Giphy More

UK Regulators Order Facebook-owner Meta To Sell Giphy

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  • Completely irrelevant (Score:5, Insightful)

    by omnichad ( 1198475 ) on Tuesday November 30, 2021 @10:27AM (#62033335) Homepage

    Could they not find a smaller nit to pick? Is there some secret value to this that I'm unaware of?

    They generally use WebP and not GIF anyway. Not even their name has value

    • Re:Completely irrelevant (Score:5, Interesting)

      by Rosco P. Coltrane ( 209368 ) on Tuesday November 30, 2021 @10:32AM (#62033347)

      The powers that be around the world are pretty much powerless in front of the big data behemoths. This is just a token gesture to convince their constituents that they haven't become totally irrelevant yet. The big data firms that get hit by those symbolic slaps on the the wrist play along to maintain the illusion and keep growing unabashed.

    • Re: (Score:2)

      by DarkOx ( 621550 )

      Nope because they care f*k'all about actual consumer protection etc. They do care about memes though. Memes being that pesky communications medium that tend to cost them elections.

      Its just fear that FB + Giphy could result in more use of memes with an even wider audience for them. They don't want that.

      • Re: (Score:2)

        by Ksevio ( 865461 )

        Its just fear that FB + Giphy could result in more use of memes with an even wider audience for them.

        I think it's more the opposite. Giphy is already used across a number of platforms (even MS Teams integrates them!) and the fear is FB could restrict that unfairly or worse, control which memes are available across all platforms.

    • Re:Completely irrelevant (Score:4, Insightful)

      by AmiMoJo ( 196126 ) on Tuesday November 30, 2021 @10:44AM (#62033383) Homepage Journal

      Giphy does use a variety of formats, including WebP.

      It's value is in its search engine, which contains a huge amount of metadata about the short animations. That enables users to quickly find things like memes and reaction GIFs, and for sites to suggest them based on the content of the user's post.

      If Facebook/Meta decided to make it exclusive to them then other sites that integrate it like Twitter and Discord would lose a valuable resource.

      • I really would be surprised if a company like Twitter doesn't have its own engine ready to launch if they ever lost access. Even if just as a data research project along the way to building something else. And since so much of it is tied directly to brand sponsored content (otherwise Giphy would be a DMCA wasteland), the major companies would quickly repopulate their content on a second site).

      • All your memes are belong to us?

    • Re: (Score:3)

      by Entrope ( 68843 )

      They generally use WebP and not GIF anyway. Not even their name has value

      I blame trademark law. They probably couldn't trademark the name WebPee because everyone already thinks the Internet is full of urine. (To paraphrase the late Sen. Ted Stevens, the Internet not a big truck. It's a series of tubes. Sewer pipes, to be specific.)

    • Smaller than one tech company buying a service used by many other tech companies? That isn't nit picking, that is just straight up preventing an anticompetitive acquisition. How big does an acquisition need to be before you give a shit? Clearly $400m is not enough.

      They generally use WebP and not GIF anyway.

      Something completely irrelevant to anything being discussed right now.

      Not even their name has value

      Except it does, you just being upset that it's not called WebPly doesn't change the fact that the company is clearly worth $400m and their name accounts for a good chunk of that

  • If you're gonna pull a stunt like this, at least have the brains to require approval and not mess around with everyone's employment in the middle of it.
  • Big tech, while useful in the main, are scavengers. They are too big to fail in some cases, and no matter what they do, they know they can afford the fines, oversight stuff, and speed bumps imposed by various governments. A couple of billion in fines is nothing to Facebook, Google, Microsoft. Sure, they don't want to pay out, but it doesn't really affect them. What we are seeing is big tech have become modern feudal lords with the people as their vassals. We, the people, willingly give up our valuable data

    • Vassalage is pretty cool. That's just modern federalism for the feudal era. It's serfdom that you need to look out for. Serfs can't choose to leave or move to someone else's land. They are property of the land owners in the way that deer in the King's Forest belong to the royal family.

  • I'm clearly missing something important here, because I am having difficulty grocking how exactly a UK regulatory body has jurisdiction over a US company, with regards to their purchase of another US company. What is the precedent for such an action? Can Meta (aka Facebook) simply ignore the ruling, arguing that the UK has no jurisdiction over them in this matter?

    • Re:Precedence, and jurisdiction? (Score:5, Informative)

      by FictionPimp ( 712802 ) on Tuesday November 30, 2021 @11:21AM (#62033477) Homepage

      I think ignoring the ruling would require them to stop doing business in the UK. Which on a whole would be good for the UK and bad for Facebook.

    • Re:Precedence, and jurisdiction? (Score:4, Informative)

      by remoteowl ( 9059291 ) on Tuesday November 30, 2021 @11:24AM (#62033487)
      Regulators can control whether or not a company can operate within their territory. Russia, for example, says, "OK, Big Company X, you can operate in Russia and offer your services to our citizens, but all data on Russians must be stored on your servers hosted in Russian data centers, and that data cannot be sold to people outside of Russia." This kind of thing is commonplace and becoming more common. We are literally seeing the Internet being broken up into blocks. Russian Internet, Chinese Internet, etc. The illusion we were once under about the Internet sees the damage and routes around it is not quite how it works now.

    • > Can Meta (aka Facebook) simply ignore the ruling, arguing that the UK has no jurisdiction over them in this matter?

      Sure but they probably have London offices which can be raided.

      This is why Putin so desperately wants Big Tech to open offices in Russia. They call it 'nexus' but normal people call it 'hostages' for Big Gun to threaten.

      Imagine 180 countries around the world all telling Facebook what its M&A activity can be. There will be a guarantee of impossible orders to buy and sell simultaneously.

      • Can Meta (aka Facebook) simply ignore the ruling, arguing that the UK has no jurisdiction over them in this matter? Sure but they probably have London offices which can be raided.

        Ok...so, why would an internet company "need" offices in UK...you can still get to FB, etc over the internet, no need for physical presence there at all, right?

        I must be missing something, but not sure what.

        • FB will still be doing business in the UK, so the UK can seize card payments etc from Visa, Mastercard etc

          London also has some pretty significant internet exchanges, so it can block FB traffic there for a lot of Europe, Africa etc.

    • Re: (Score:1)

      by Anonymous Coward

      This happens with pretty much every major merger. Look at Softbank's (a Japanese company) ownership of ARM; the UK can potentially block nVidia buying it if it chooses too.

      Why? Because ARM is heavily based in the UK, and so it can be forced to shut down if it doesn't comply.

      The fact is, Facebook makes billions in the UK, it's going to be cheaper to sell off Giphy than be forced out of the UK.

      But this is a good thing, the whole "but it's a US company!" thing is absolute nonsense. None of these are US compani

    • Re:Precedence, and jurisdiction? (Score:5, Insightful)

      by thegarbz ( 1787294 ) on Tuesday November 30, 2021 @01:12PM (#62033869)

      jurisdiction over a US company

      Facebook UK Ltd. is a US company? Doubt it. With 2800 employees in the UK, offices in London, and $1.38 billion in revenue in the UK they don't sound like the kind of company a UK regulator wouldn't have jurisdiction over.

      What is the precedent for such an action?

      They are at the whims of the local regulator where they are homed. Facebook is not a "US company" they are a multi-national company, and being a multi-national makes them subject to the laws of the countries in which they are incorporated, be that Facebook UK Ltd., Facebook Germany GmbH, Facebook France s.a.r.l., Facebook Australia Pty Ltd., or clearly their headquarters since this is where they register most of their profits: Facebook Ireland Ltd.

      • And if Facebook UK had bought another British corporation that might be relevant. But Facebook UK didn't buy anything, its US based parent corporation bought another US based corporation. British courts have no authority over what happens in the US, so it is hardly unreasonable to ask why the hell they should have any say in the matter.

        And no, it doesn't matter that Facebook (well, "Meta" I guess) does business globally, it was founded in the US, registered in the US, and its HQ is in the US. Ditto for

        • And if Facebook UK had bought another British corporation that might be relevant.

          Incorrect. That's not how multi-national companies work. That's how international companies work, there's a very big and important legal difference between a company which merely operates somewhere and a company which is incorporated somewhere. Facebook UK is legally indistinguishable in this acquisition from it's parent corporation. Facebook UK will own and have access to the assets of Giphy. The UK regulator has a say.

          So does the EU regulator. Incidentally it made news that the Australian regulator is als

    • I'm clearly missing something important here, because I am having difficulty grocking how exactly a UK regulatory body has jurisdiction over a US company, with regards to their purchase of another US company. What is the precedent for such an action? Can Meta (aka Facebook) simply ignore the ruling, arguing that the UK has no jurisdiction over them in this matter?

      That's an interesting question. I suppose a company could stop doing business in a country and simply ignore a ruling. Yu could see a Balkanization of the internet as some tings are geoblocked; which raises the question of liability if someone accesses a site that is geoblocked with a VPN. The ramifications go beyond tech, for example. A country could decide that a carmaker also making batteries is anticompetitive and order divesture. Or a telco merger. For physical assets it gets more complicated.

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