“The collective impact of hundreds of smaller acquisitions can lead to a monopolistic behemoth.”
“I think of serial acquisitions as a Pac-Man strategy,” Rebecca Slaughter, US Federal Trade Commissioner, said in September. But regulators are starting to take the attitude that smaller acquisitions can also damage competition. WhatsApp cost it $19 billion in 2014, Oculus VR was $2 billion, also in 2014, and Instagram just $715 million in 2012. “What this shows is a change in attitude, and that's critical.”Ĭompared to some of Meta/Facebook’s other well-known acquisitions, Giphy is small fry.
“The same worldwide enforcers that allowed Facebook to suck up Instagram and WhatsApp are now very wary of even small purchases by the major platforms,” says Eleanor Tyler, a legal analyst at Bloomberg Law, a legal research company. The CMA’s decision is also significant because Facebook’s Instagram takeover was waved through by its predecessor, the Office of Fair Trading, back in 2012, in what was the most high-profile probe into the deal outside the US. That realization means regulators everywhere will now be on high alert for what the legal world calls “killer acquisitions”-where an established company buys an innovative startup in an attempt to squash the competition it could pose in the future. “There's been a realization that quite small deals over the years have not been scrutinized very extensively,” says Richard Pepper, a partner at the law firm Macfarlanes. Usually a cautious bunch, lawyers agree that the CMA’s decision is a significant moment in the global regulatory wrangling of Big Tech, as it means deals that slipped through in the past may now have a new bar to clear. A spokesperson says the company disagrees with the decision and that it is considering all options, including an appeal. Meta, the parent company of Facebook, isn’t pleased. Never before has a tech giant been ordered to press undo on a completed deal rather than pay a fine or make promises about how the newly merged businesses would operate. Meta, the UK’s Competition and Markets Authority (CMA) ruled, must now sell all the GIFs-just 19 months after it reportedly paid $400 million for them. That’s the strange position taken by Britain’s competition watchdog in choosing to block Meta’s takeover of GIF repository Giphy.