10 ms·
UK regulator set to block Meta's Giphy deal
- gigglesupstairs 5y agoAs they should. At this point, no general purpose service can do well under Meta.
- jsnell 5y agoDo you think Giphy can do well as a stand-alone business? They're willing to sell for $400M despite taking $150M in VC, which suggests that the company itself doesn't really believe it.
- deleted 5y ago[deleted]
- scoopertrooper 5y agoWhat is even their business model? What's the risk to consumers of Meta dominating the animated emoticon business? Giphy strikes me of being one of those 'your product is actually a feature' companies.
- docflabby 5y agoGiphy's business model has nothing to do with GIFs, they are just a front really - its all about advertising and user tracking, essentially the same as FaceBook. All those shared gifs are tracked and used to target advertisments with.
- mohanmcgeek 5y agoI hate FB just as much as the next person but blocking a M&A deal needs real grounds. To say this needs to happen for all future deals is extreme.
- readflaggedcomm 5y agoIs that the legal threshold for prohibiting acquisitions in the UK?
- blowski 5y agoI want this to be the start of a forced breakup of Facebook, WhatsApp and Instagram. There’s zero benefit to consumers, and a lot of harm.
- LatteLazy 5y agoBe careful. You and I aren't consumers of Meta. We're part of the product. You're arguing that advertisers should get a better deal since they are the consumers in this case. Personally I don't like advertisers and seeing them get lower prices, more space etc does nothing for the average citizen imho...
- selfhoster11 5y agoNobody except Meta and the advertisers looks at this situation like that. It's quite obvious what parent meant.
- LatteLazy 5y agoI'm just pointing out that breaking up Facebook means a better deal for advertisers not users. They are the ones facing a monopoly. I'm happy for you or op to decide who is the "consumer" etc.
- ajb 5y agoThe article linked here: https://news.ycombinator.com/item?id=29377943 https://news.ycombinator.com/item?id=29377943 suggests that the The Competition and Markets Authority also thinks that way.
- blowski 5y agoWe are consumers of Facebook, but not customers. We consume the content they put in front of us, and pay for the service by also consuming adverts.
- missedthecue 5y agoI think there is consumer benefit to scale (particularly when it comes to social networks), and I don't see how Instagram and Facebook being separate entities improves or changes anything. They'll have the exact same owners, same employees, same management... the only difference will be that Zucc gets richer and the employee's W-2s will say Instagram Inc instead of Meta inc.
- quiffledwerg 5y agoI couldn’t read the article but am I right in understanding the UK regulators think Facebook shouldn’t buy a funny gif company? Good thing brexit has prevented the UK from all those crazy euro rules and regulations.
- xyzzy123 5y agoWhat if Meta obtain a monopoly on the supply of funny gifs. > "At that time the CMA argued Meta could cut off its rivals’ access to gifs, and demand platforms like TikTok or Snapchat hand over more of their data in order to access gifs, consolidating power in Meta’s hands." It... it seems like that may be a fair summary of the regulator's concern :/
- quiffledwerg 5y agoThings will become very sad on the other social networks. Zuckerberg is ruthless in his determination to own all the funny gifs and good times. It’s not fair cause nothing will be left for Twitter, making it all just people yelling at each other and no one laughing at funny cats and memes. If this deal is not stopped then Zuckerberg will have bought much of the worlds supply of laughs. He’s shown he’s willing to use those laughs against us. It’s a dystopian future that I’m glad the UK is standing up against. Thank god there’s a democracy that stands against such devastating overreach. We suspect zuckerberg’s grand plan is to lock away all the worlds laughs in a big vault so no one can get them, and finally the world will be under his control. Unless The Incredibles are sent in to Facebook headquarters to break in and steal the worlds sense of humor back.
- ubercow13 5y agoIs your argument basically that businesses that are deemed 'silly' shouldn't be regulated the same way as 'serious' ones? What other aspects of the law do you think shouldn't apply to them, and how do we as a society decide what is too silly to be taken seriously?
- 5y ago
- aligray 5y agoDoes anyone else hit back immediately when confronted with the GDPR/cookie consent modal?
- Cthulhu_ 5y agoOnly if there's no obvious 'dismiss' button, or my JS snippet to remove any fixed and modal elements doesn't work.
- zethraeus 5y agoI'd love any pointers to precedent for how this plays out from here. 1. The acquisition was >1 year ago. (And there's some question of whether FB followed the correct process.) 2. The antitrust concern is in one major market with a ton of political and regulatory power — but still one of many. (Are there international trade agreements that inherently make this ruling impactful outside of the UK?) 3. The acquired company was very unlikely to find a better outcome, and would have been fairly likely to require costly restructuring for lack of this one. I don't take this super seriously — because giphy feels replicable and, well, it's gifs. But curious if anyone else sees impactful competitive/strategic concerns, or if the matter at hand is really just political precedent setting. Mostly I feel bad for giphy people. Hope they're nicely contractually protected.
- klelatti 5y agoIn any acquisition an assessment of the regulatory risks has to be part of the process for the vendor. They took a risk in selling to FB and that risk hasn’t paid off. No one is entitled to the ‘best’ price if it involves something which falls foul of competition law. And on competition - will anyone else be interested in GIFs if the dominant social network owns the market leader?
- M2Ys4U 5y ago>And there's some question of whether FB followed the correct process. There are more than questions - FB was found guilty and fined for not following the correct process.
- klelatti 5y ago> “Companies are not required to seek CMA approval before they complete an acquisition but, if they decide to go ahead with a merger, we can stop the companies from integrating further if we think consumers might be affected and an investigation is needed.” > He added: “We warned Facebook that its refusal to provide us with important information was a breach of the order but, even after losing its appeal in two separate courts, Facebook continued to disregard its legal obligations. This should serve as a warning to any company that thinks it is above the law.”
- dalmo3 5y agoDon't those regulators have anything better to do? For instance have they settled on how to pronounce gif yet?
- ceva 5y agoNoooo i hope FB wont buy it! Giphy is an essential tool for trolling
- bijant 5y agoHow does such a retroactive block work ? I imagine Meta executives have already taken over the reigns and directed the company towards full integration with facebooks other services. If Giphy had had a project in the works that could disrupt any of Facebooks monopolies than surely that project would be canceled by now and anyone involved would have transferred internally to the relevant Meta subgroup or left. So if blocking the deal results in Meta loosing control of Giphy but getting it’s money back, wouldn’t that be a great outcome for Meta as they would have achieved their main goal for free ?
- vineyardmike 5y agoWhich Facebook monopoly are you referencing? None of their businesses seem to be a monopoly. Ben Thompson explained why it’s not a monopoly well: https://stratechery.com/2021/regulators-and-reality/ https://stratechery.com/2021/regulators-and-reality/
- gostsamo 5y agoSo, if Ben Thompson says that FB is not a monopoly we are all good and we can cut on all these pesky regulators.
- vineyardmike 5y ago> if Ben Thompson says that FB is not a monopoly Well, he was referencing a bunch of sources, including courts rejecting those pesky regulators cases. I could have cited the courts, but BT's writing is a lot easier to read and cites the courts. > we are all good and we can cut on all these pesky regulators. Who's case was thrown out (in the US) for not having any basis for their claim. Its basically the same claim as all HN. Its big, so its a monopoly. Except there is no fact basis for it. They don't have a dominant market share. > the FTC has failed to plead enough facts to plausibly establish a necessary element of all of its Section 2 claims — namely, that Facebook has monopoly power in the market for Personal Social Networking (PSN) Services. The Complaint contains nothing on that score save the naked allegation that the company has had and still has a “dominant share of th[at] market (in excess of 60%).” https://storage.courtlistener.com/recap/gov.uscourts.dcd.224921/gov.uscourts.dcd.224921.73.0.pdf https://storage.courtlistener.com/recap/gov.uscourts.dcd.224...
- CTDOCodebases 5y agoAm I the only one that refuses to call them meta?
- mattowen_uk 5y agoMeta is the company, Facebook & Instagram are the products.
- jacquesm 5y agoOnly if you're gullible. Facebook is the company, Facebook.com and Instagram.com are the major web properties, Mark Zuckerberg is the man behind all of these. Any attempt to whitewash this should receive solid pushback.
- CTDOCodebases 5y agoI think type of corporate reorganising was just an attempt to avoid the business from being broken up in an antitrust suit.
- jacquesm 5y agoDefinitely not. This kind of brand whitewashing should be ignored as much as possible and whenever the 'new' brand is mentioned it should be followed by major former brand in brackets ('Facebook') to ensure that people aren't duped.
- LordAtlas 5y agoHow does a UK regulator have any say in an M&A deal between two American companies? What am I missing?
- mjburgess 5y agoFrom the FT, > Facebook controls 40 to 50 per cent of the UK display advertising market according to the CMA. Giphy had offered paid advertising in the US and the CMA argued that, absent the merger, Giphy could have gone on to expand that service into the UK — something the company has denied. I'm guessing its related to this point. However, > . In a response to the CMA’s provisional findings Meta accused the watchdog of “engaging in extraterritorial over-reach” And yet the EU is also doing the same, > In Brussels, EU officials are looking at new ways to examine mergers that fall outside their scope on the basis of revenues alone
- mixtur2021 5y agoMeta/FB has a legal presence in the UK and offers services in the UK. It needs to operate according to UK Law. In practice, I don't know what the reality of this will mean. Does Giphy continue to operate as a separate company in the UK then? How's that going to work?
- aahortwwy 5y agoUK regulators regulate the UK market, in which Meta and Giphy both participate. If companies don't want to comply with UK regulation they are, of course, free not to participate in the UK market.
- mnd999 5y agoI think this would be an excellent outcome for all.
- docflabby 5y agoI think this is old news, there was as court case back in May by Facebook lost appealing the decision. https://www.theregister.com/2021/05/14/facebook_giphy_court_appeal/ https://www.theregister.com/2021/05/14/facebook_giphy_court_... "The acquirer may quickly take steps to consolidate its investment by removing the parts of its own business that compete with the target. If the CMA were prevented from making orders that impinged on the acquirer's existing business, divestiture at the end of a relatively lengthy process would, by itself, be incapable of either restoring the status quo at the time of the merger or protecting competition in the relevant market." It looks like the CMA have the right to roll things back as if the merger never took place to the detriment of the acquirer (Facebook). Its likey Giphy won't suffer any losses, rather Facebook will be forced to compensate it, prehaps the plan all along for the VCs :P
- klelatti 5y agoThe court case, I think, was about putting integration on hold rather than blocking acquisition.
- niffydroid 5y agoUgh. So they'll block this but the government allows the likes of private equity to buy companies who will then assert strip or load up the target with debt.
- jacquesm 5y agoDifferent arms of the same government.
- 3guk 5y agohttps://archive.md/ATvE3 https://archive.md/ATvE3 for those who are unable to see past the paywall.
- Reason077 5y agoSo Facebook hoovering up Instagram and WhatsApp is fine, but we draw the line at, of all things, GIFs? Seems like backwards priorities and tokenism to me.
- oliwarner 5y agoGiphy hosts images on thousands and thousands of other websites. They're buying analytics access to further enable them to profile their users, sell that as an advertising platform. Instagram, WhatsApp give deep profiles into their users but they're pretty up front about what they can do. CDNs need to be treated in special ways. They can leak information back to someone like FB and deanonymise activity.
- ClumsyPilot 5y agoWell the regulator finally woke up and smelled the coffee
- LatteLazy 5y agoI don't care about this particular decision. That said, it's interesting that approval for mergers and acquisitions: * Has become an international affair where not just big but small countries expect a veto. * Is not predictable. This and other deals have been approved in some jurisdictions but then refused in others. And without apparent reason why what is a monopoly in one place isn't in others. * Take very long periods of time (this deal was first announced on may 2020, didn't get provisional refusal until August 2021 and now is still uncertain). Imagine trying to run a company for 18 months while your existence and entire future is entirely down to the flip of a coin. Imagine the possibility for corruption and nepotism and backroom deals. I'd really like to see some simplification in this area before it goes bad. The Arm NVidea acquisition is just as bad. Publicly announced over a year ago. Europe just opened an investigation. What have they been doing for a year? What happens when someone in that office let's drop that for 0.1% of the deal price he can make it happen, or they can wait another few years for a preliminary refusal?
- klelatti 5y ago> * Has become an international affair where not just big but small countries expect a veto. Small countries have the right to control what happens in their own markets too. > * Is not predictable. This and other deals have been approved in some jurisdictions but then refused in others. And without apparent reason why what is a monopoly in one place isn't in others. Different countries have different laws. > * Take very long periods of time (this deal was first announced on may 2020, didn't get provisional refusal until August 2021 and now is still uncertain). It takes time to gather data etc. > Imagine trying to run a company for 18 months while your existence and entire future is entirely down to the flip of a coin. It's not the flip of a coin. Atm / Nvidia is not great but the regulatory risk was entirely predictable and clearly Softbank was prepared to take that risk. Personally, I think it should be blocked and quickly.
- mrkramer 5y agoYea don't block the acquisitions of Instagram and WhatsApp but block the acquisition of irrelevant GIF company. Totally makes sense. Politically motivated decision that's what it is.
- somehnacct3757 5y agoGiphy is a trojan horse into most sms and messaging apps. The gif aspect of it is pointless from FB's perspective. It's all about knowing who you're talking to, when and how often. I totally stopped using Giphy after this acquisition. It isn't as bad as outright buying messaging platforms or social networks, but it let FB reach into areas they otherwise would never have visibility such as android keyboards and slack channels.
- mrkramer 5y agoI know Zuck is greedy but I can't believe he is so greedy that he wants even usage data from GIFs. Facebook has thousands data points and signals from Facebook app, Instagram app, Messenger app and WhatsApp. If he wants even more data points from GIFs then I suppose it needs to get blocked. But looking from market competition perspective Giphy is irrelevant; it does not compete with Facebook, Instagram, Snapchat or TikTok. I mean you can say it competes for attention but that's it. GIFs are not that relevant as photos or videos are.
- somehnacct3757 5y agoFB's friend graph is their main product. Everything else exists to enrich the friend graph. With Giphy, you embed a gif from your Android keyboard and FB recieves your IP and puts a uid on the gif. Just like a tracking pixel, when your recipient views the image FB now has their IP and knows you both communicate. Using the IPs as lookups they can now make a friend suggestion in FB without any activity having taken place in that product. In reality the fingerprinting is more sophisticated than IP but the idea is the same. This is not beneath FB, it is the lifeblood of their business. Number of friends is a key metric. They know if they can ratchet that number up then you will use the platform more. Which is why they paid so much for Giphy which otherwise has no business model or path to profitability.
- jacquesm 5y agoReminder: Meta = Facebook.
- iam-TJ 5y agoThis is a follow-on from the June 2020 Initial Enforcement Order (IEO) that Facebook repeatedly breached and, after two appeals, was fined £50.5m in October 2021 https://www.gov.uk/government/news/cma-fines-facebook-over-enforcement-order-breach https://www.gov.uk/government/news/cma-fines-facebook-over-e...