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While Meta largely failed in its appeal, the competition tribunal found that the CMA withheld information in its decision that would have helped Meta’s case.
Meta has been largely unsuccessful in its appeal against the UK Competition and Markets Authority (CMA) order to have the company unwind its acquisition of Giphy.
A decision made by the Competition Appeal Tribunal yesterday (14 June) upheld the decision of the UK regulator on five out of six challenged grounds.
However, the tribunal found in favour of Meta on one of the grounds on which the appeal was based.
Plans to acquire Giphy were announced in 2020. But following an investigation, the CMA found last year that Meta’s purchase of the GIF-maker would substantially lessen competition and innovation in the market.
The competition watchdog ordered Meta to sell Giphy, but the Facebook parent company fought to overturn that decision.
In a statement welcoming the tribunal’s decision, the CMA said the acquisition would “reduce competition between social media platforms and had already removed Giphy as a potential challenger” in the display advertising market in the UK.
“Innovation is a vital part of the competitive process, particularly in digital markets. We also welcome the tribunal’s endorsement of the ‘care and careful consideration’ given to this issue by the independent inquiry group in this case,” said CMA chief executive Andrea Coscelli.
“This judgment helps reinforce our ability to protect competition and innovation in digital markets.”
While the tribunal dismissed most of Meta’s grounds of appeal, it ruled that the CMA had withheld information in relation to the treatment of certain third-party confidential information.
By failing to properly inform Meta of Snap’s acquisition of Gfycat, it said the CMA undermined Meta’s case. In light of this, the tribunal will now consult with the CMA and Meta again to decide what should happen next.
“The tribunal considered that the CMA’s approach to disclosure in this case overly favoured confidentiality concerns of third parties,” the CMA wrote in a statement. “The impact of this on the CMA’s decision will be determined in due course.”
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