Image: © Rafael Henrique/Stock.adobe.com
The tech giant acquired Giphy for $400m in 2020, but was forced to sell after the UK’s CMA claimed the deal would harm competition in the social media sector.
Meta has agreed to sell Giphy to stock image repository Shutterstock for $53m, a fraction of the amount it paid in 2020.
Shutterstock is buying the looping video search engine in an all-cash deal, with Meta entering an API agreement to ensure Giphy content can still be accessed across Meta’s platforms. The deal is expected to close next month.
The tech giant made moves to acquire Giphy in 2020, in a deal reportedly worth up to $400m. But this acquisition attracted the attention of a UK regulator, which had concerns that the deal could harm competition.
The UK’s Competition and Markets Authority (CMA) began an investigation just a month after the deal was announced. In 2021, the regulator said Meta’s purchase of the GIF-maker would substantially lessen competition and innovation in the social media market.
Meta lost an appeal against the UK watchdog’s decision last year and has sold the company as part of the CMA’s order.
Giphy claims to host the world’s largest repository of animated images known as GIFs, which are used on various platforms such as Facebook, Instagram, TikTok and Microsoft Teams.
Shutterstock said the deal will expand its own content library to include GIFs and stickers, which are used in more casual conversations. The stock image company said the deal also gives it access to a massive user base of 1.7bn daily users.
“This is an exciting next step in Shutterstock’s journey as an end-to-end creative platform,” said Shutterstock CEO Paul Hennessy. “Shutterstock is in the business of helping people and brands tell their stories.
“Through the Giphy acquisition, we are extending our audience touch points beyond primarily professional marketing and advertising use cases and expanding into casual conversations.”
The deal is another regulatory blow for Meta, which received the biggest GDPR fine to date earlier this week. The company was hit with a €1.2bn fine for its Facebook data transfers from the EU to the US, along with an order to suspend these data transfers within five months.
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