back to article UK competition regulator to Meta's Facebook: Sell Giphy, we will not approve the purchase

The UK competition watchdog has ordered Meta, the owner of Facebook, to sell Giphy after deciding purchase of the animated GIF creator platform will damage rivals, consumers and advertisers. Today's directive is effectively the same as that handed down in August, when the Competition Markets Authority voiced concerns that …

  1. Gavin Chester

    Be interesting to see if the CMA has teeth here, its dealing with a big multinational that is not headquartered in the UK.

    Will it make any difference or will Meta pull services and wait for the masses to scream at the authorities to rethink the situation.

    Seems very like the no default password rules mulled, great on paper but you wonder how it will work in our global reality.

    1. Insert sadsack pun here

      The CMA regularly makes decisions about corporations that aren't managed from the UK. Just look at the recent list: https://www.gov.uk/cma-cases Air Europa, Nvidia, Sony Music...

      Facebook thinks it's a special case but it ain't. It's already been fined 50 million quid by the CMA over its Giphy antics. The CMA has teeth! https://www.gov.uk/government/news/cma-fines-facebook-over-enforcement-order-breach

      1. Phones Sheridan Bronze badge

        The CMA only has teeth if it can collect that fine. The ICO found out the hard way that issuing fines and receiving actual physical payments are 2 completely separate things. Even the ICO had to concede that it would never be able to chase payment from foreign entities with no physical presence in the UK.

        1. Anonymous Coward
          Anonymous Coward

          Facebook is definitely selling ads in the UK, so that should not be an issue. They have a growing office presence as well.

        2. Mike 137 Silver badge

          Catch 22?

          " Even the ICO had to concede that it would never be able to chase payment from foreign entities with no physical presence in the UK.

          UK GDPR Article 27 'Representatives of controllers or processors not established in the United Kingdom' requires any such organsiation to appoint a representative via which compliance can be enforced. Failure to do so is itself an offence, but in the absence of a representative or presence, enforcement may not be possible. An interesting conundrum at least.

        3. localzuk

          Facebook very much have a UK presence... They have 2700 employees in the UK, and at least 1 building in London...

          1. Phones Sheridan Bronze badge

            Facebook UK Ltd as an entity has a UK presence, however records show that the sole company officers are based in the USA, and that at their last declared financial position, they had about £600K of local assets. So again, good luck enforcing those fines.

            Current officers

            Pre-covid Accounts (scroll to page 14)

            1. katrinab Silver badge
              Coat

              Scroll to page 12 actually.

              Note that numbers are in £000.

              Tangible fixed assets - £386m

              Debtors due within one year - £623m

              Cash and cash equivalents - £258m

              Tangible fixed assets are on page 35

              Land and buildings - very difficult to get out of the country: £300m

              Office equipment - £8.6m

              Computer equipment - £3.4m

              Plus some other stuff that might be more difficult to sell at auction.

              No problem at all in collecting the £50m fine.

              1. Phones Sheridan Bronze badge

                Yup, I missed the legend, my bad. Will be interesting to see in 2 weeks time when they are due to post their next set of accounts if those bank accounts are now drained, and all the assets have been liquidated and now they are leasing land, buildings and equipment from a US based holdings company.

                Their 2021 set of accounts won't be due until Dec 2022, so they have a year to creatively make money disappear. The appeals process will probably last longer than that.

                1. katrinab Silver badge

                  2021 accounts will be likely be due in Sept 2022 as the covid extension probably won’t apply.

              2. localzuk

                Also, don't forget that access to the UK market is very profitable for them too. An intangible asset. Which could be very much damaged if they get banned for breaking our laws...

      2. katrinab Silver badge

        It is not as easy for Facebook to liquidate and set up a new company as it is for some fly-by-night nuisance calling operation.

    2. Captain Hogwash

      will Meta pull services

      That would be the best outcome.

      >and wait for the masses to scream at the authorities to rethink the situation

      If so, I hope they're waiting a long time.

      1. cyberdemon Silver badge
        Mushroom

        Re: will Meta pull services

        ^ - This - ^

        MetaFace/ZuckCorp for room 101 please.

    3. Roland6 Silver badge

      >Be interesting to see if the CMA has teeth here

      I suspect much will depend on what their European counterpart says - then the ankle nipper can declare success whilst ignoring the Doberman...

    4. John Brown (no body) Silver badge

      "Be interesting to see if the CMA has teeth here, its dealing with a big multinational that is not headquartered in the UK."

      Even if the CMA has legal difficulties due to drawn out appeals and eventual enforcement of the fine, other countries will be looking at how they can use the ruling in their countries too, assuming they agree with it. This could get quickly get expensive if multiple countries find against the buy-out too and MetaFace have to go to appeal in multiple jurisdictions. Many countries are finally beginning to get concerned about the size and scope of Big Tech and their seeming "creative" observance of laws and taxation systems.

  2. irg

    The Openreach solution

    Surely the CMA should be persuaded that if BT/Openreach "independence" is acceptable regarding the quasi-cornering of ISP provision, then a similar measure might be an acceptable one for Facebook?

    Though, to be completely fair, at least BT plays along with the CMA. FB failing statutory reporting measures is an own goal deserving of a forced reversion of sale...

  3. elsergiovolador Silver badge

    Real problem

    Again they are focusing on issues irrelevant in the grand scheme of things.

    What really is stifling competition is tax avoidance by these big corporations. How smaller company can compete with an organisation that has substantially smaller tax burden?

    CMA should have been breathing on HMRC neck and checking how DPT (Deferred Profit Tax) is being investigated and paid.

    CMA should maintain an index comparing how much tax % wise SMEs pay versus big corporations and ensure that those corporations falling behind are getting excluded from the market.

    1. Doctor Syntax Silver badge

      Re: Real problem

      I doubt what you ask for is within CMA's remit. We have enough problems with govt. over-reach without trying to encourage it.

      1. elsergiovolador Silver badge

        Re: Real problem

        Not sure what is the point of that organisation then.

        It seems like a very poor value for money.

        1. Insert sadsack pun here

          Re: Real problem

          "Not sure what is the point of that organisation then."

          TBF, the clue is in the name. The Competiton and Markets Authority "work[s] to promote competition for the benefit of consumers, both within and outside the UK". If you're worried about dodgy tax affairs, then the right government department would usually be HM Revenue and Customs.

          1. elsergiovolador Silver badge

            Re: Real problem

            So if a corporation does not pay taxes, which is giving them huge competitive advantage and at the same time HMRC does nothing about it, then surely CMA should give them a "nudge" no?

  4. Doctor Syntax Silver badge

    "A Meta spokesperson sent us a statement:...."

    To quote - well, they would say that, wouldn't they.

    1. Pascal Monett Silver badge
      Trollface

      Obviously. It's a kink in the Master Plan to control the world.

      But it's fine. Meta's 3D enhanced-reality-auto-marijuana-injector-goggles will smooth over the issues and gain massive acceptance.

      As soon as El Zuck can negociate the contract with North Korea.

  5. iron Silver badge

    Giphy still exists? I stopped using them in May 2020.

    I wonder why...

  6. Rich 2 Silver badge

    Eh?

    “ Both consumers and GIPHY are better off with the support of our infrastructure, talent, and resources”

    You could substitute “Both consumers and GIPHY” with any phrase you care to come up with and it’s still impossible for that sentence to make any sense. The only exception is the phrase “Nobody”

  7. spireite Bronze badge
    Mushroom

    Block their servers

    I imagine their (untaxed) UK revenue being yanked through lack of access to the UK market through their various platforms would make a big difference though and get their attention.

    It would also benefet the social lives of millions here in the UK if they were blocked.

    1. This post has been deleted by its author

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