Meta sells Giphy to Shutterstock at a loss following UK order
The UK ordered Meta to sell Giphy at the end of 2021, and now the social media heavyweight is following through. Stock photo provider Shutterstock has reached a deal to buy Giphy from Meta for $53 million. Notably, this won't break compatibility — Meta is entering a programming interface agreement that ensures Giphy's GIFs work properly across services like Facebook, Instagram and WhatsApp.
The sale is expected to close in June. Shutterstock says the purchase will boost its stake in "casual conversations" by adding GIFs and stickers to its catalog, not to mention Giphy partners like Microsoft, TikTok and Twitter. The buyout will also help foster Shutterstock's generative AI strategy, particularly in mobile, and should help the company reach more advertisers.
Meta (then Facebook) bought Giphy in 2020 to fold its GIF library into platforms like Instagram. The deal was reportedly worth $400 million. The UK's Competition and Markets Authority (CMA) soon launched an investigation to determine if the acquisition would hurt competition, though, and fined Meta $69.6 million for continuing with merger plans without the regulator's approval. A year later, the CMA told Meta to sell Giphy after finding that the takeover would unfairly cement Meta's market dominance.
We've asked Meta for comment. The firm fought the CMA, arguing that Giphy neither operated in the UK nor counted as display advertising that justified a split. Meta also contended that Giphy and users alike were better off with its resources at their disposal.
The swap shouldn't change things much if you use Meta's social networks. This may affect Shutterstock's customers, though. Chief executive Paul Hennessy hopes Giphy will help commercialize Shutterstock's GIF collection — don't be surprised if animated images play a prominent role in Shutterstock's offerings.This article originally appeared on Engadget at https://www.engadget.com/meta-sells-giphy-to-shutterstock-at-a-loss-following-uk-order-131932973.html?src=rss