Anyone working on mergers and acquisitions at Meta Platforms, formerly Facebook, might want to look for a new job. The British antitrust regulator’s decision to force Meta to divest Giphy, the tiny GIF search engine it acquired last year for $315 million, demonstrates that even small acquisitions are off limits to the tech giant. And while this was a decision in Britain, the Federal Trade Commission chair Lina Khan has signaled that tech companies’ habit of buying up small firms is also on her radar.
The Giphy decision is extraordinary on a couple of levels. Start with the fact that the U.K. Competition and Markets Authority is forcing the unwinding of a completed acquisition, which is unusual in itself. On top of that, the CMA has based its decision on a totally speculative analysis. Giphy was an American company that wasn’t generating any revenue in the U.K. when Meta bought it last year. And yet the CMA concluded that Giphy could have become a serious competitor to Meta in the U.K. display ad market if it had stayed independent. Wow. Maybe CMA staffers ought to be in venture capital given their ability to see into the future.