The announcement marked a major victory for advocates of more stringent antitrust enforcement around the world who are pushing to stop or deter U.S. tech giants from scooping up smaller competitors through acquisitions.
The U.K’s Competition and Markets Authority (CMA) in November ordered Meta to spin off Giphy, citing concerns the deal would entrench the company’s dominance in social media. The tech giant appealed the ruling, but the regulator said Tuesday it stood by the decision.
U.K. authorities said that by paying $400 million to acquire Giphy, a service that allows users to search for animated images and videos known as GIFs, Meta would “limit other social media platforms’ access to GIFs, making those sites less attractive to users and less competitive.” The CMA said the deal had already harmed a “potential challenger” in the digital display advertising market.
Meta spokesperson Chris Sgro called the ruling “disappointing” but said the company would accept it “as the final word on the matter” and “work closely with the CMA on divesting Giphy.”
But the Silicon Valley giant also signaled the outcome wouldn’t necessarily discourage it from seeking to expand through other deals.
“We will continue to evaluate opportunities — including through acquisition — to bring innovation and choice to more people in the U.K. and around the world,” Sgro said.
The dispute highlights how regulators globally are dialing up scrutiny of mergers and acquisitions that could give major tech companies an unfair leg up on competitors, and increasingly testing more aggressive legal theories to stop them.
Facebook’s parent company is fighting a separate bid by the U.S. Federal Trade Commission to block its acquisition of virtual reality company Within Unlimited. The agency has argued that the deal would “tend to create a monopoly,” but the company has strongly pushed back, calling the virtual reality market “dynamic” and competitive and the FTC’s claims “not credible.”
The FTC is also leading a separate antitrust lawsuit against Meta seeking to force the Facebook parent company to spin off Instagram and WhatsApp, which it also owns.
Lawmakers in the United States have separately proposed legislation to make it easier for regulators to block acquisitions by the tech giants, but it has thus far failed to pick up enough support to pass.
Those and other cases challenging mergers and companies’ market power face significant hurdles in the U.S. legal system, which has long interpreted antitrust violations more narrowly.
Still, antitrust advocates say it’s important for regulators to bring the challenges to test new legal theories about what constitutes anti-competitive conduct in digital markets.
Alex Harman, director of government affairs for competition policy at the anti-monopoly group the Economic Security Project, said that “bringing a case with a novel argument, like one focused on data or potential competition, could result in expanding the law with good precedent.”
The FTC’s antitrust lawsuit against Meta, for one, argues that the company is able to maintain monopoly power by exploiting its “deep trove of data about users’ activities, interests, and affiliations” to fuel its advertising business — a relatively untested legal theory. Regulators are arguing that by hoarding so much data, Facebook is able to ward off competition.
Critics are hoping the ruling in the U.K. paves the way for other successful attempts to force the tech giants to divest parts of their businesses.
“In forcing Meta to sell Giphy, the U.K. CMA is embracing the very kind of structural remedy needed to break Meta’s monopoly power,” said Sarah Miller, executive director of the advocacy group American Economic Liberties Project.
She added, “Breaking up Big Tech is mainstream now; this is only the beginning.”
Sen. Elizabeth Warren (D-Mass.), who criticized Meta’s Giphy deal and has called for breaking up the tech giants, echoed the sentiment.
“The U.K.’s antitrust enforcement against Meta is a major win for competition policy and an encouraging sign for the FTC’s lawsuit to spin off Instagram and WhatsApp,” Warren said in a statement to The Technology 202.
New York attorney general calls for penalties for homicide live streams
In a 47-page report, New York Attorney General Letitia James (D) recommended that lawmakers in New York criminalize perpetrators’ acts of live-streaming homicides and impose civil penalties such as fines on people who share shooters’ videos and images, Cat Zakrzewski and Drew Harwell report. The proposal, which as written would penalize users for sharing links to public videos, could draw First Amendment concerns.
“If it’s something like incitement or threats, that’s one thing,” said Genevieve Lakier, a University of Chicago law professor who studies freedom of speech. “But if you’re just circulating it in order for it to go viral, that’s not a threat, that’s just disgusting behavior. And the First Amendment protects a lot of disgusting behavior.”
The report warned that restrictions on live-streaming “should be drafted in a manner that ensures conformity with the First Amendment.” It also says there’s “no societal benefit” to having perpetrators sharing homicide live streams, and that laws should try to avoid penalizing videos with “educational, historical or societal benefits.”
Indian news outlet reviews its reporting after disputed stories on Meta
The Wire launched an internal review of its stories about Facebook parent Meta, which pushed back on the news outlet’s story asserting that the company gave an official from India’s ruling party the power to censor Instagram posts, Gerry Shih, Niha Masih, Joseph Menn and Naomi Nix report. Editors from the Wire spent a week defending the story but were pressed to review the outlet’s work after technology experts pointed to a growing list of discrepancies in videos and emails that the outlet shared.
The review is a “new twist to a sensational dispute between a reputed Indian news organization and a powerful Silicon Valley company — a clash that has captivated the technology and media industries in both India and the United States,” my colleagues write.
In a statement, the Wire said it would remove the stories “from public view.” The outlet also said that “in the light of doubts and concerns from experts about some of this material, and about the verification processes we used — including messages to us by two experts denying making assessments of that process directly and indirectly attributed to them in our third story — we are undertaking an internal review of the materials at our disposal.”
Amazon workers near Albany, N.Y., overwhelmingly vote against unionization
Workers at a warehouse in Castleton-on-Hudson, N.Y., voted 406-206 against unionization in a setback for the small Amazon Labor Union, which secured a historic victory when workers voted to unionize at a Staten Island warehouse this year, Lauren Kaori Gurley reports. The defeat highlights the difficulty for unionizing at Amazon, the country’s second-largest employer, which has strongly opposed union efforts for decades.
(Amazon founder Jeff Bezos owns The Washington Post.)
Amazon Labor Union President Chris Smalls said in a statement that the voting process “wasn’t free and fair” and the defeat wouldn’t be the end of the union’s presence at the warehouse. The union didn’t respond to a request for comment. Before the election results were announced, Amazon spokesman Paul Flaningan said Amazon respects employees’ rights to join a union. The union has argued that Amazon retaliated against employees observing the election. Flaningan said the company doesn’t retaliate against workers for exercising their labor rights.
- Deborah Birx, the coordinator of the Trump administration’s coronavirus task force, has joined Palantir’s federal advisory board along with retired Gen. Gustave F. Perna, who was the chief operating officer for Operation Warp Speed; Greg Simon, the former executive director of the Obama administration’s Cancer Moonshot Task Force and former congressman Will Hurd (R-Tex.).
- Josh Rogin, who was chief of staff for formercongressman Ted Deutch (D-Fla.), is joining the Computer & Communications Industry Association as vice president of government relations. Alvaro Marañon, who was most recently a fellow at the Lawfare Institute, is joining CCIA as policy counsel. Jordan Rodell, who was a legislative issue manager at Stateside Associates, will be a state policy manager at CCIA.
- The Federal Trade Commission holds an event on digital advertising to children today.
- Government and industry officials speak at the Georgetown Center for Business and Public Policy’s Spectrum Summit today.
- The Institute for Security and Technology hosts an event on the data transfer agreement today at 11 a.m.
- The Federal Deposit Insurance Corporation’s acting chairman, Martin J. Gruenberg, speaks at a Brookings Institution event on digital assets and banks on Thursday at 10 a.m.
Correction: Our Monday newsletter said that Will Wilkerson was a contestant on “The Apprentice.” He was not.
