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U.K. regulators order Meta to sell Giphy

392 points by jeremylevy 5y ago

akamhy 5y ago
Okay, I'm dumb. But can anyone please explain how the UK has any right to stop an American Company(Meta) from acquiring another American Company(Giphy)? If the UK can, can Germany, India, or even China and Russia do something similar?
- that_guy_iain 5y ago
  They can remove their access to the country. The EU has been doing the same for quite a while. Also, Facebook UK is a thing.
  - sircastor 5y ago
    The UK could arbitrarily block Facebooks IPs, I guess. I imagine this would end up like the carriage fee battles between networks and cable operators, with Facebook and the UK running ad campaigns about who is in the right here. I think UK citizens would bed more annoyed at the government than at FB.
    - arlcode 5y ago
      More likely is that they would ban British companies (or companies operating in Britain) from publishing ads on Facebook and doing business with them (including local data center operators and ISPs, Google and Apple as app store operators). It's all about economic power. The UK has to think about potential retaliation by the US. In the end,Trade wars are often bad for everyone. Usually it's beneficial to find a compromise if possible.
      - Teandw 5y ago
        You don't have economic power when you're breaking the law. (Generally)
        sircastor 5y ago
        I don’t follow this. All kinds of economic power exists outside of legal boundaries, on large and small scales. Everything from street prices for drugs to bribery demands at government levels. Even laws designed curb market abuse through fines can be considered a cost of doing business rather than a disincentive, making it an economic tool for the perpetrators.
        Teandw 5y ago
        I refer to this specific situation.
      - Apocryphon 5y ago
        Maybe they could just ban Giphy while it's still Meta-owned?
      - 3np 5y ago
        Reminds me of the history of Pirate Radio in the UK
    - JumpCrisscross 5y ago
      > UK could arbitrarily block Facebooks IPs, I guess If Facebook defied a British order like that, the U.K. could enforce quite a lot through American courts.
- Denvercoder9 5y ago
  Both Meta and Giphy operate in the UK market, and the UK can set conditions for operating in that market. The EU, India, China and Russia can do the same.
  - worker767424 5y ago
    What would happen if they just disabled Giphy in the UK?
    - colinmhayes 5y ago
      They'd probably start being fined by the UK regulators.
    - mdasen 5y ago
      It still removes Giphy as a "competitor". Let's say that Facebook bought all competing messenger programs, but then disabled them in the UK because it was anti-competitive. Well, then the only option left is to use Facebook Messenger. Giphy isn't necessarily a direct competitor (and we might disagree with the UK regulators on their assessment of the merger), but just shutting off Giphy in the UK probably wouldn't do what they want. They might want Giphy willing to sell their data to other parties that are competitors to Facebook. If that's the business value of Giphy, merely disabling it in the UK still gives Facebook the worldwide power of Giphy and it would be hard for a NewGiphy to compete with the only advantage being "we have UK data." It's also up to the UK to determine if such a remedy would satisfy them. Facebook can't disable Giphy and then say "you don't have jurisdiction anymore." That's not how it works. Facebook could pull out of the UK by closing its offices there, but pulling out might involve also not selling ads to UK-based businesses (before Brexit, there's the possibility that Facebook could lean on the common market to continue selling ads). Basically, disabling Giphy in the UK (or even worldwide) doesn't really solve the issue.
- aigo 5y ago
  Any company has to follow the law where they operate. Being an American-headquartered company doesn't really mean anything in this context.
  - frockington1 5y ago
    They could probably get the American government to flex if needed. 'Drop these demands or no Aston Martin will be sold in the US'. The problem with both companies being American is that the American government can retaliate with popular support, the ads write themselves
    - joshuaissac 5y ago
      It depends on how far either side is willing to go. The UK is one of the few countries with which the US has an annual trade surplus ($21.8bn),[1] which is worth a lot more each year than Giphy's purchase price or even Facebook's UK revenue, so there is a lot of room for retaliation. Traditional British media will drum up support for anti-Facebook actions, and the current UK government was elected on a mandate of defending perceived British sovereignty, with economic considerations being less important.[2] The UK government has already engaged in actions that harm its economic interests to safeguard its sovereignty.[3] 1. https://ustr.gov/countries-regions/europe-middle-east/europe/united-kingdom https://ustr.gov/countries-regions/europe-middle-east/europe... 2. https://ukandeu.ac.uk/new-polling-reveals-shift-from-immigration-to-sovereignty-as-the-priority/ https://ukandeu.ac.uk/new-polling-reveals-shift-from-immigra... 3. https://www.cer.eu/insights/ten-reflections-sovereignty-first-brexit https://www.cer.eu/insights/ten-reflections-sovereignty-firs...
- JetSetWilly 5y ago
  Meta is free to entirely pull out of the UK market if it wants to ignore the ruling. Any country is free to say "if you want to operate here, you must do X" but how onerous X can be before the company concerned pulls out, will depend on the market importance of that country. I doubt that Meta would obey an equivalent order by Liechtenstein.
  - miracle2k 5y ago
    Certainly any country can claim for itself all manner of powers, which sometimes will run up against limits of enforcement capability. The OPs question only makes sense if understood in a normative sense: even if they can, what gives them the right? or, is it a good idea? We can assume for certain, I think, that UK regulators operate within a set of rules, and in many cases they will not have the power to interfere with an acquisition between two foreign businesses - for good reason. Regulators in other countries may not have the power to stop this particular deal in the first place. Maybe the powers of UK regulators need to be further restricted.
    - tsujp 5y ago
      Which part of a sovereign country’s government governing their sovereign territory is the problem here? I imagine since jaywalking is legal in the UK (but not in the US) you have similar comments? How could there be a different law about the same topic in different countries! How is this any different to “in country X there are Y laws”. Giphy could be from Mars and it would make no difference.
    - Kbelicius 5y ago
      I think you aren't understanding this at all. UK regulators aren't stopping anything, the merger already happened. UK regulators are simply saying that if Facebook wants to continue its operations within the borders of UK they need to sell Giphy. They were given this right by the democratically elected government of UK. Regulators in every other country have the same power, dictate conditions on which one participates in their markets.
      - 5y ago
- gtirloni 5y ago
  They have a legal presence in the UK (a subsidiary of the Facebook HQ) and probably want to merge those two UK companies as well.
- deleted 5y ago
  [deleted]
vmception 5y ago
US Regulators: ok EU Regulators: ok UK Regulators: waaaaait a minute Honestly, I don't mind the UK's rationale here, but I would still tell them to pound sand, or "sod off". Fairly decent sized market but I would consider denying them service and seeing what happens next. Sure, gives room for a competitor to come in but also breaks their internet in the near term.
- klelatti 5y ago
  So FB is exempt from all UK law because FB can always say if you enforce your laws we'll pull out from the UK and break your internet?
  - Latty 5y ago
    Thus proving exactly why we should break up companies like facebook, lest they exert undue control over the country.
  - vmception 5y ago
    Yes, absolutely, where have you been? It doesn't matter how it makes you feel, or the ideals your animated civics class taught you in School House Rock, countries are in competition with each other for business, and this gives leverage to businesses that exist beyond the governance ideals of any single country. If I was a decision maker in an organization of that size, I would let them find out how much of their private sector has incorporated products that would make their websites not load if we exited the market, and how much of their communication and communication history is tied up in the products too. If I was in the government, I would also play the cards I was dealt on behalf of the people and try to break them up. I don't have strong opinions on anything, I can play any side of this, this is really easy for me.
    - Apocryphon 5y ago
      What if multiple nations' governments collaborated on this? The recent global minimum corporate tax agreement indicates that international cooperation isn't completely impossible. And it's not as if the current American administration is a big fan of Facebook.
tschellenbach 5y ago
Succession season 3 describes this accurately
easytiger 5y ago
Farcical CV padding.
- krallja 5y ago
  Who is padding their CVs? The ... regulators?
  - google234123 5y ago
    Yes
  - easytiger 5y ago
    Yup.
iam-TJ 5y ago
Press release from the Competition and Markets Authority: https://www.gov.uk/government/news/cma-directs-facebook-to-sell-giphy https://www.gov.uk/government/news/cma-directs-facebook-to-s... Summary of final Report (30th November) https://www.gov.uk/cma-cases/facebook-inc-giphy-inc-merger-inquiry#final-report https://www.gov.uk/cma-cases/facebook-inc-giphy-inc-merger-i... Case documents: https://www.gov.uk/cma-cases/facebook-inc-giphy-inc-merger-inquiry https://www.gov.uk/cma-cases/facebook-inc-giphy-inc-merger-i...
Pxtl 5y ago
Okay, I am as concerned about monopolization as the next guy, especially after Facebook bought WhatsApp and Instagram... But Giphy? Really? I mean, it's not exactly a sticky site. It's basically plumbing.
- tremon 5y ago
  It's a new opportunity for the regulator to show they aren't (still) sleeping behind the wheel, I guess. Also: I disagree that Giphy has no value, it's exactly because of its ubiquitous presence on other sites that it has value for Facebook: yet another way to stalk and profile web users.
- JaimeThompson 5y ago
  It would allow Facebook to get even more information about what services and applications people are using.
- cm277 5y ago
  It's another (big) data source for Facebook to track you across the web and build a profile to sell ads against.
  - sharken 5y ago
    With that logic it would mean that Facebook is barred from acquisition of big data sources in the UK. That would be breaking news indeed.
    - ben_w 5y ago
      Such things can be by degree, and bans can be caused by previous misbehaviour. For example, it’s fine to drive at 70 mph on a UK motorway (usually), but not OK to do 90. And if you’re repeatedly caught doing 90, you may have your license to drive at all revoked.
- Nextgrid 5y ago
  Giphy collects a ton of data which Facebook is very much interested in.
uniqueuid 5y ago
Strictly speaking, the title is wrong: Facebook never bought Giphy, it prepared an acquisition whose execution was now blocked.
- thspimpolds 5y ago
  Phew, I was wondering when they closed the sale. I swear I would have remembered that
  - dylan604 5y ago
    Don't swear. Place bets instead. That way, it's more expensive to be wrong which is a much better lesson to learn.
- Deukhoofd 5y ago
  Looking at the press release from the UK government, the title is correct, they are ordering Meta to sell Giphy. https://www.gov.uk/government/news/cma-directs-facebook-to-sell-giphy https://www.gov.uk/government/news/cma-directs-facebook-to-s...
  - uniqueuid 5y ago
    I stand corrected. This was apparently not an approval process but rather seeking remediation after the completed acquisition. Not quite familiar with UK competition law. In any case, it's very interesting to look at Meta's proposals (which were ultimately rejected) [1] [1] https://assets.publishing.service.gov.uk/media/61a4bfa2e90e07044a559d57/Facebook_GIPHY_-_Summary_of_Final_Report.pdf https://assets.publishing.service.gov.uk/media/61a4bfa2e90e0...
- iam-TJ 5y ago
  Incorrect according to the CMA Reports' clause 3 and clause 63: Clause 3: Facebook completed the acquisition of GIPHY on 15 May 2020, but has been required to hold the businesses separate since 9 June 2020, when the CMA imposed an Initial Enforcement Order (which was amended by a Variation Order on 29 June 2021). Clause 63: As noted above, we have decided that the sale of GIPHY is the only effective remedy to the SLCs that we have found. While divestiture of the acquired business is not an uncommon outcome when the CMA finds an SLC, divestiture of the GIPHY business poses particular challenges arising as a consequence of the completion of the Merger, and Facebook’s related actions, namely the termination of GIPHY’s revenue function and team, the transfer of almost all GIPHY staff on to Facebook employment contracts and the transfer of GIPHY’s back office functions to Facebook. These actions took place prior to the CMA issuing its Initial Enforcement Order holding the Facebook and GIPHY businesses separate and mean that, in several respects, GIPHY is in a significantly weaker position than it was pre-Merger. https://assets.publishing.service.gov.uk/media/61a4bfa2e90e07044a559d57/Facebook_GIPHY_-_Summary_of_Final_Report.pdf https://assets.publishing.service.gov.uk/media/61a4bfa2e90e0...
taxyz23 5y ago
I guess I don't get it. This is based on speculative misuse - that FB may in the future deny access to Giphy to competitors. So if you own a tool that your competitors may use then that's anti-competitive? Seems like that could apply to a lot of companies. Why not wait for actual misuse and base a case on that? Also what's so special about Giphy? Seems it could be duplicated fairly easily by any serious competitor. And competition being defined as other social media platforms? Pretty broad definition. Seems FB hatred is making bad law. And that bad law will bite others not just FB.
- LatteLazy 5y ago
  The current UK government is very corrupt. The issue here is that someone at FB missed their request for a "donation". I'm sure this can all be sorted for a low 6 figure sum...
  - ddek 5y ago
    This is a regulator, not a political appointee or contracted agency.
    - LatteLazy 5y ago
      Im not quite sure what you mean. In the UK system everyone is a political appointee. Just how blatent a PM is about interfering in "independent" agencies depends on the PM. And Boris literally just sacked the head of the standards commission and dissolved it to save a political nobody who isn't even needed to shore up a majority. There is no separation of powers here, as long as the PM is the PM, he is basically god.
  - pjc50 5y ago
    Facebook literally employ the former deputy Prime Minister.
    - LatteLazy 5y ago
      Yeah, but he was never really "in" with the current lot (not corrupt, different political party, not an old boy) and he hasn't been part of a government for 7 years. It's time for a new hire/donation/whatever
pmontra 5y ago
> Meta argued that the regulator was “sending a chilling message to start-up entrepreneurs: do not build new companies because you will not be able to sell them.” This overlooks the traditional and perhaps now unpopular reason to start a company: making money by selling something useful. No need to sell the company. By the way, Facebook buys, does not sell.
- notahacker 5y ago
  Ironically, that statement is the strongest argument in favour of blocking the acquisition I've heard. Any company so arrogant about its market dominance it assumes that the only way for an entrepreneur to succeed in building a company in its market is to sell to them deserves to be broken up.
  - paulcole 5y ago
    I think that's the only way for a gif hosting/copyright infringing platform to succeed. https://medium.com/@pasql/giphy-is-stealing-from-artists-689177b20c08 https://medium.com/@pasql/giphy-is-stealing-from-artists-689... Other companies that exchange money for goods and services might have better luck.
  - Spivak 5y ago
    Or ya know, that startups talk about having an exit that's either getting bought by someone or an IPO. Nobody in the startup world seems terribly interested in building a lifestyle business.
    - dd36 5y ago
      The media only talk about companies with investors. Investors want exits. Investors influence the media to talk about companies they’re invested in.
      - jimnotgym 5y ago
        Or the intermediary making money out of the investors want exits, and only get paid when a deal moves through. For many investors they need neither exits, dividends or anything other than capital growth.
dazc 5y ago
Remedies proposed by Facebook, such as a promise to keep the service open to rivals, were not sufficient to address the competition concerns, the regulator added. https://www.telegraph.co.uk/business/2021/11/30/facebook-ordered-sell-giphy-competition-watchdog/ https://www.telegraph.co.uk/business/2021/11/30/facebook-ord... They would break a promise - surely not?
- Hamuko 5y ago
  >They would break a promise - surely not? What, again?
- chippiewill 5y ago
  > They would break a promise - surely not? I think the CMA stopped listening to promises from US companies after Kraft completely reneged on their takeover of Cadburys.
boh 5y ago
It's just open season on Meta and big tech in general. Giphy isn't exactly an ad powerhouse nor a real competitor to Meta, but any acquisitions are now opportunities for political theater.
- thesuitonym 5y ago
  True, but perhaps big tech shouldn't be so big. If Facebook's mergers had been under this much scrutiny in the past, the web would probably be a better place today. It's too little too late, but it's not exactly a witch hunt.
- YXNjaGVyZWdlbgo 5y ago
  Giphy is and was always just a metadata aggregator with the side effect of hosting funny little copyright infringing videos.
  - dylan604 5y ago
    They are not infringing copyright. They definitely qualify for use under several parts of the copyright law.
    - llacb47 5y ago
      You mean fair use, and not necessarily. Also "fair use" is not a law in the U.K.
      - dylan604 5y ago
        Works used for satirical work are allowed. Seems like what these are being used for.
        detaro 5y ago
        Parody is fair use. Satire usually isn't. And I'd doubt most use of e.g. posting gifs on social media in response to something counts as "satire".
game_the0ry 5y ago
Western, mostly UK an EU, regulators are dumb. They wanted to help their citizens with privacy, instead the whole world gets annoying cookie pop ups. Boomer energy is too strong in the Western world.
- funshed 5y ago
  The UK government is considering withdrawing the requirement for consent to cookies from UK law. To be clear this was an EU Import into UK regulation.
  - game_the0ry 5y ago
    It was an import to US regulation as well.
whalesalad 5y ago
Imagine a government across the world asking you to sell a portion of your business. I’m not a fan of FB but I’d be laughing with Zuck in the board room at this one.
- Denvercoder9 5y ago
  It's not a random government across the world. Facebook does business in the UK market, has an office and personnel in the UK, and has customers in the UK.
  - voidfunc 5y ago
    How relevant is the UK mow that it has exited the EU? If I am Facebook I pull out of the UK or at least threaten to do so. The general public will scream at their MPs to fix the problem.
    - colinmhayes 5y ago
      Downvoted but I think you're right. If Facebook calls their bluff here it's going to be extremely politically unpopular to actually shut them down.
      - blibble 5y ago
        remember: traditional media hates facebook there would be wall to wall coverage about facebook deciding the law doesn't apply to them
        colinmhayes 5y ago
        And plenty of people hate traditional media. THere would be wall to wall ads from facebook about how they're being mistreated by the jealous traditional media and corrupt government.
        Apocryphon 5y ago
sebow 5y ago
While seeing FB, Twitter, Google,etc. get hit by regulators & governments doesn't really bother me (because these monopolies should be getting attacked, not necessarily for the fact that they're monopolies but because they behave in an anti-competitive, scummy way, to mention only one reason), what i do wonder is how exactly does this pave the way for new emerging platforms that are more secure, less censored and better designed than these ones.Especially when you consider the amount of regulations one has to "obey" when launching a new platform. While it's certainly easy to cite few companies that have better ethics than these major corporations, the attacks of EU&US regulators&politicians feel like it's just both a money-grab and also political talk in order to restore "trust in institutions"(Which is down-trending in EU since 2015 for example) while degrading the influence of these platforms (which again, it's not a bad thing, just an over-looked fact).
cletus 5y ago
I can't help but think of Aesop's fable about the goose that laid the golden eggs. That goose is the tech industry and what may kill it is pointless, kneejerk political or regulatory action. In the social media space, if Facebook has such a monopoly, why have there been a number of competitors that have come along and represented an existential threat in the same way Facebook did to Myspace? Examples: Instagram, Twitter, Snapchat and Tiktok. But this regulatory ruling isn't even about Facebook's dominant business, it's about the potential harm to the advertising business from a $30m easyily-reproducible company. Sure, Giphy had a lot of installs but it's not even the only such company in this space (eg Tenor? IIRC). And if you're going to go after a company for dominance in advertising and you go after Facebook and not Google? How does any of this make sense? These companies are also facing competition from competitors who aren't and won't be shackled by the threat of government intervention. Instead, those companies are extensions of the state. I am of course talking about China and the likes of Tencent, Alibaba, Tiktok and so on. So I'm confused by this move because it seems ultimately pointless. Anyone claiming it's "sending a message" miss the point that this cuts both ways. It can embolden those who oppose regulation as government overreach and this may hurt actual anticompetitive practices rather than potential anticompetitive practices. All around, this just seems so... dumb.
- Teandw 5y ago
  1) "But this regulatory ruling isn't even about Facebook's dominant business, it's about the potential harm to the advertising business" Yes, using it's dominance to control a market and decide where people get to advertise, rather than people having a choice. 2) If you think Giphy is easily-reproducible, it shows how little you know about things in general. 3) "And if you're going to go after a company for dominance in advertising and you go after Facebook and not Google?" 1 minute of research would show you that the CMA already are and have been at Google's doors too. More recently about Google's power when it comes to third-party cookies; which is for advertising. The CMA are pretty much always going at the big companies for something. It seems like you need to understand what you're talking about, before you try and talk about it.
  - jimbob45 5y ago
benja123 5y ago
Honestly I don’t think this will end well for the regulator. I am not a lawyer, but I am guessing that if Facebook blocks giphy usage in the UK there is very little the UK regulator can do to them. I see that as the likeliest scenario as they won’t want to sell giphy. This will only make the regulator look foolish. The average person won’t understand why Facebook owning giphy is a problem (it’s not a social network) but they will be annoyed when they lose access to giphy in slack, WhatsApp and other platforms that use it in.
- klelatti 5y ago
  So FB harms their UK business and gets a big fine. UK FB goes without GIFs - not a huge deal!
  - danuker 5y ago
    > without GIFs I'd say they're not GIFs, they're embedded mini-websites with their own tracking cookies and JS and whatnot. If only they were GIFs.
    - klelatti 5y ago
      Good point!
    - viro 5y ago
      thats not how gifs work ffs
      - Nextgrid 5y ago
        Giphy is much more than a GIF though. Here's a link for example: https://media0.giphy.com/media/mlvseq9yvZhba/giphy.gif https://media0.giphy.com/media/mlvseq9yvZhba/giphy.gif If you load it in a browser you get an entire HTML page full of spyware - it is not a GIF. They're detecting the user agent and deciding whether to send spyware or not - only curl'ing the link gives you the raw GIF by the looks of it.
- 5y ago
callamdelaney 5y ago
Oh, it means facebook.
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AltruisticGapHN 5y ago
I don't know anything about these laws and companies so forgive my silly question but... what about Giphy's responsibility? Can be bought against their will? Or do they sell just to cash in? Because if they do it sounds to me like they have no better morals than Meta.
- throwthere 5y ago
  When Facebook bought giphy like any other buyers the buyer assumes all liabilities.
paxys 5y ago
So, they want to be paid off. The standard EU/UK MO.
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literallyaduck 5y ago
How about holding Facebook responsible for the stolen IP available on Giphy with the same fervent prosecution which was shown to the Love Guru pirate?
gorgoiler 5y ago
It seems odd for the CMA to order a sell off when Facebook and Giphy are both US companies. Wouldn’t it make more sense to require Giphy UK to cease trading, and force Facebook UK to compete on its own? UK authorities policing UK companies and all. (Please don’t respond to this as a hot take on globalisation — my comment is a serious question about how the UK competition authority can be most effective, not a wide eyed lamentation on why we can’t have world peace etc.)
- avianlyric 5y ago
  Facebook is free to stop operating in the UK if it wants. If wants to continue operating in the UK, and retain ownership of Giphy, then any UK based assets they have (such as revenue from UK business) will probably end up being forfeited via fines from the regulator.
  - gorgoiler 5y ago
    Cmon. They have a huge engineering office there bringing in massive amounts of tax revenue already. UkGov doesn’t want to chase off 1000x employees bringing in £100M of income tax revenue. FB’s VAT on ad sales in the UK is probably only £500m.
    - funshed 5y ago
      Facebook paid just £28.5m in UK corporation tax in 2018, despite record £1bn in UK Sales.
      - gorgoiler 5y ago
        Once again, cmon. Facebook has a significant and legitimate cost centre in Menlo Park, CA. As in, sure, FBUK sell ads, but the value is backed by a 4billion eyeball set of social networks that didn’t just build themselves.
    - joshuaissac 5y ago
      > FB’s VAT on ad sales in the UK is probably only £500m. It is probably closer to £0. VAT is only chargeable on non-business ad sales. Where a Facebook does pay VAT for a sale to a business, that cost is passed on to the buyer, which can claim it back from HMRC. The exception being very small businesses that are below the VAT registration threshold.
arenaninja 5y ago
Do Amazon next thanks
mullingitover 5y ago
Bold move for a declining country like the UK to pull a business-hostile move like this. Meta could probably just pull out of the UK entirely without any serious bottom line impact. You'd think the UK would be pulling an Ireland and throwing around tax shelter bargains and generally offering sweetheart deals like there's no tomorrow. Trying to bully businesses they desperately need is...brave.
- BeFlatXIII 5y ago
  How much tax revenue to Meta bring to the UK? Perhaps they're better off without each other.
- parasense 5y ago
  > Bold move for a declining country like the UK Agreed Not sure why the UK regulators are even concerned about the Giphy deal, it's small time... like, compared to the Nvidia + Arm deal. > Meta could probably just pull out of the UK entirely without any serious bottom line impact. Not sure about that, but there are plenty of options. Meta probably needs data-centers in the UK, but those could in theory move to Ireland at great expense, probably at far more expense than the Giphy deal was worth. Then comes the issue of Facebook employees in the UK, and to what extent their jobs contribute to the UK economy, and what impact that would have for those jobs to move to another country. I'm not sure regulating Facebooks' small-time deals like Giphy is worth the potential risk of losing Facebook in the UK. Another potential way forward would be to sell Giphy, then create new Giphy-like business unit. I'd argue this is perhaps the least expensive way forward, costing more than it was to buy Giphy, yet much less than the cost of moving UK operations out.
- funshed 5y ago
  You should vary your press, the UK is booming. The unemployment rate is lower than pre-pandemic at 4% with wages growth to match. The OECD thinks the UK economy will expand 6.7 per cent in 2021, the highest rate of growth among the G7. UK is in the top 10 higher number of facebook users.
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HDHGVJKBJU 5y ago
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4monthsaway 5y ago
I'm sure Zuckerberg is hard at work thinking of how to start his own government soon enough
- jldugger 5y ago
  Well, he's already started his own supreme court... https://theconversation.com/why-facebook-created-its-own-supreme-court-for-judging-content-6-questions-answered-160349 https://theconversation.com/why-facebook-created-its-own-sup...
a-dub 5y ago
good to see that post-brexit britain is remaining just as relevant as ever...
worker767424 5y ago
I don't know what Giphy's financials looked/look like, but it felt like the type of startup that could only ever run on VC funding to eventually be bought up by a larger player. I'm not convinced there's a self-sustaining business, there.
someonewhocar3s 5y ago
AFAIK Giphy is of little to no consequence, with no business case except through spying (ie generic signals value) It sends mostly copywrong funny little animations along with text messages, on every service that cannot be thought to be very secure. Facebook here is arguing correctly that for most of these 'people use it and it's somehow social' the only business cases come out of combined signals intelligence, or there may be investors that simply care about time spent with a service or total customer volume. Facebook's engagement stats etc. are thusly valueable that there is a business case at all. What value is it, if it weren't some sort of hedgemony being build? "will also be required to reinstate the innovative advertising services that Giphy offered before the merger." UK is very funny! It does not understand 'computer' that well yet, but now it commands what's probably the most exploitative/derogatory/negative component of Giphy to be reinstated! Such savvy government activities. Certainly, this will 'materially' impact the advertisement market, hahaha!

392 points by jeremylevy 5y ago

Okay, I'm dumb. But can anyone please explain how the UK has any right to stop an American Company(Meta) from acquiring another American Company(Giphy)? If the UK can, can Germany, India, or even China and Russia do something similar?

that_guy_iain 5y ago
They can remove their access to the country. The EU has been doing the same for quite a while. Also, Facebook UK is a thing.
- sircastor 5y ago
  The UK could arbitrarily block Facebooks IPs, I guess. I imagine this would end up like the carriage fee battles between networks and cable operators, with Facebook and the UK running ad campaigns about who is in the right here. I think UK citizens would bed more annoyed at the government than at FB.
  - arlcode 5y ago
    More likely is that they would ban British companies (or companies operating in Britain) from publishing ads on Facebook and doing business with them (including local data center operators and ISPs, Google and Apple as app store operators). It's all about economic power. The UK has to think about potential retaliation by the US. In the end,Trade wars are often bad for everyone. Usually it's beneficial to find a compromise if possible.
    - Teandw 5y ago
      You don't have economic power when you're breaking the law. (Generally)
      - sircastor 5y ago
        I don’t follow this. All kinds of economic power exists outside of legal boundaries, on large and small scales. Everything from street prices for drugs to bribery demands at government levels. Even laws designed curb market abuse through fines can be considered a cost of doing business rather than a disincentive, making it an economic tool for the perpetrators.
        Teandw 5y ago
        I refer to this specific situation.
    - Apocryphon 5y ago
      Maybe they could just ban Giphy while it's still Meta-owned?
    - 3np 5y ago
      Reminds me of the history of Pirate Radio in the UK
  - JumpCrisscross 5y ago
    > UK could arbitrarily block Facebooks IPs, I guess If Facebook defied a British order like that, the U.K. could enforce quite a lot through American courts.
Denvercoder9 5y ago
Both Meta and Giphy operate in the UK market, and the UK can set conditions for operating in that market. The EU, India, China and Russia can do the same.
- worker767424 5y ago
  What would happen if they just disabled Giphy in the UK?
  - colinmhayes 5y ago
    They'd probably start being fined by the UK regulators.
  - mdasen 5y ago
    It still removes Giphy as a "competitor". Let's say that Facebook bought all competing messenger programs, but then disabled them in the UK because it was anti-competitive. Well, then the only option left is to use Facebook Messenger. Giphy isn't necessarily a direct competitor (and we might disagree with the UK regulators on their assessment of the merger), but just shutting off Giphy in the UK probably wouldn't do what they want. They might want Giphy willing to sell their data to other parties that are competitors to Facebook. If that's the business value of Giphy, merely disabling it in the UK still gives Facebook the worldwide power of Giphy and it would be hard for a NewGiphy to compete with the only advantage being "we have UK data." It's also up to the UK to determine if such a remedy would satisfy them. Facebook can't disable Giphy and then say "you don't have jurisdiction anymore." That's not how it works. Facebook could pull out of the UK by closing its offices there, but pulling out might involve also not selling ads to UK-based businesses (before Brexit, there's the possibility that Facebook could lean on the common market to continue selling ads). Basically, disabling Giphy in the UK (or even worldwide) doesn't really solve the issue.
aigo 5y ago
Any company has to follow the law where they operate. Being an American-headquartered company doesn't really mean anything in this context.
- frockington1 5y ago
  They could probably get the American government to flex if needed. 'Drop these demands or no Aston Martin will be sold in the US'. The problem with both companies being American is that the American government can retaliate with popular support, the ads write themselves
  - joshuaissac 5y ago
    It depends on how far either side is willing to go. The UK is one of the few countries with which the US has an annual trade surplus ($21.8bn),[1] which is worth a lot more each year than Giphy's purchase price or even Facebook's UK revenue, so there is a lot of room for retaliation. Traditional British media will drum up support for anti-Facebook actions, and the current UK government was elected on a mandate of defending perceived British sovereignty, with economic considerations being less important.[2] The UK government has already engaged in actions that harm its economic interests to safeguard its sovereignty.[3] 1. https://ustr.gov/countries-regions/europe-middle-east/europe/united-kingdom https://ustr.gov/countries-regions/europe-middle-east/europe... 2. https://ukandeu.ac.uk/new-polling-reveals-shift-from-immigration-to-sovereignty-as-the-priority/ https://ukandeu.ac.uk/new-polling-reveals-shift-from-immigra... 3. https://www.cer.eu/insights/ten-reflections-sovereignty-first-brexit https://www.cer.eu/insights/ten-reflections-sovereignty-firs...
JetSetWilly 5y ago
Meta is free to entirely pull out of the UK market if it wants to ignore the ruling. Any country is free to say "if you want to operate here, you must do X" but how onerous X can be before the company concerned pulls out, will depend on the market importance of that country. I doubt that Meta would obey an equivalent order by Liechtenstein.
- miracle2k 5y ago
  Certainly any country can claim for itself all manner of powers, which sometimes will run up against limits of enforcement capability. The OPs question only makes sense if understood in a normative sense: even if they can, what gives them the right? or, is it a good idea? We can assume for certain, I think, that UK regulators operate within a set of rules, and in many cases they will not have the power to interfere with an acquisition between two foreign businesses - for good reason. Regulators in other countries may not have the power to stop this particular deal in the first place. Maybe the powers of UK regulators need to be further restricted.
  - tsujp 5y ago
    Which part of a sovereign country’s government governing their sovereign territory is the problem here? I imagine since jaywalking is legal in the UK (but not in the US) you have similar comments? How could there be a different law about the same topic in different countries! How is this any different to “in country X there are Y laws”. Giphy could be from Mars and it would make no difference.
  - Kbelicius 5y ago
    I think you aren't understanding this at all. UK regulators aren't stopping anything, the merger already happened. UK regulators are simply saying that if Facebook wants to continue its operations within the borders of UK they need to sell Giphy. They were given this right by the democratically elected government of UK. Regulators in every other country have the same power, dictate conditions on which one participates in their markets.
    - 5y ago
gtirloni 5y ago
They have a legal presence in the UK (a subsidiary of the Facebook HQ) and probably want to merge those two UK companies as well.
deleted 5y ago
[deleted]

vmception 5y ago

US Regulators: ok EU Regulators: ok UK Regulators: waaaaait a minute Honestly, I don't mind the UK's rationale here, but I would still tell them to pound sand, or "sod off". Fairly decent sized market but I would consider denying them service and seeing what happens next. Sure, gives room for a competitor to come in but also breaks their internet in the near term.

klelatti 5y ago
So FB is exempt from all UK law because FB can always say if you enforce your laws we'll pull out from the UK and break your internet?
- Latty 5y ago
  Thus proving exactly why we should break up companies like facebook, lest they exert undue control over the country.
- vmception 5y ago
  Yes, absolutely, where have you been? It doesn't matter how it makes you feel, or the ideals your animated civics class taught you in School House Rock, countries are in competition with each other for business, and this gives leverage to businesses that exist beyond the governance ideals of any single country. If I was a decision maker in an organization of that size, I would let them find out how much of their private sector has incorporated products that would make their websites not load if we exited the market, and how much of their communication and communication history is tied up in the products too. If I was in the government, I would also play the cards I was dealt on behalf of the people and try to break them up. I don't have strong opinions on anything, I can play any side of this, this is really easy for me.
  - Apocryphon 5y ago
    What if multiple nations' governments collaborated on this? The recent global minimum corporate tax agreement indicates that international cooperation isn't completely impossible. And it's not as if the current American administration is a big fan of Facebook.

tschellenbach 5y ago

Succession season 3 describes this accurately

easytiger 5y ago

Farcical CV padding.

krallja 5y ago
Who is padding their CVs? The ... regulators?
- google234123 5y ago
  Yes
- easytiger 5y ago
  Yup.

iam-TJ 5y ago

Press release from the Competition and Markets Authority: https://www.gov.uk/government/news/cma-directs-facebook-to-sell-giphy https://www.gov.uk/government/news/cma-directs-facebook-to-s... Summary of final Report (30th November) https://www.gov.uk/cma-cases/facebook-inc-giphy-inc-merger-inquiry#final-report https://www.gov.uk/cma-cases/facebook-inc-giphy-inc-merger-i... Case documents: https://www.gov.uk/cma-cases/facebook-inc-giphy-inc-merger-inquiry https://www.gov.uk/cma-cases/facebook-inc-giphy-inc-merger-i...

Pxtl 5y ago

Okay, I am as concerned about monopolization as the next guy, especially after Facebook bought WhatsApp and Instagram... But Giphy? Really? I mean, it's not exactly a sticky site. It's basically plumbing.

tremon 5y ago
It's a new opportunity for the regulator to show they aren't (still) sleeping behind the wheel, I guess. Also: I disagree that Giphy has no value, it's exactly because of its ubiquitous presence on other sites that it has value for Facebook: yet another way to stalk and profile web users.
JaimeThompson 5y ago
It would allow Facebook to get even more information about what services and applications people are using.
cm277 5y ago
It's another (big) data source for Facebook to track you across the web and build a profile to sell ads against.
- sharken 5y ago
  With that logic it would mean that Facebook is barred from acquisition of big data sources in the UK. That would be breaking news indeed.
  - ben_w 5y ago
    Such things can be by degree, and bans can be caused by previous misbehaviour. For example, it’s fine to drive at 70 mph on a UK motorway (usually), but not OK to do 90. And if you’re repeatedly caught doing 90, you may have your license to drive at all revoked.
Nextgrid 5y ago
Giphy collects a ton of data which Facebook is very much interested in.

uniqueuid 5y ago

Strictly speaking, the title is wrong: Facebook never bought Giphy, it prepared an acquisition whose execution was now blocked.

thspimpolds 5y ago
Phew, I was wondering when they closed the sale. I swear I would have remembered that
- dylan604 5y ago
  Don't swear. Place bets instead. That way, it's more expensive to be wrong which is a much better lesson to learn.
Deukhoofd 5y ago
Looking at the press release from the UK government, the title is correct, they are ordering Meta to sell Giphy. https://www.gov.uk/government/news/cma-directs-facebook-to-sell-giphy https://www.gov.uk/government/news/cma-directs-facebook-to-s...
- uniqueuid 5y ago
  I stand corrected. This was apparently not an approval process but rather seeking remediation after the completed acquisition. Not quite familiar with UK competition law. In any case, it's very interesting to look at Meta's proposals (which were ultimately rejected) [1] [1] https://assets.publishing.service.gov.uk/media/61a4bfa2e90e07044a559d57/Facebook_GIPHY_-_Summary_of_Final_Report.pdf https://assets.publishing.service.gov.uk/media/61a4bfa2e90e0...
iam-TJ 5y ago
Incorrect according to the CMA Reports' clause 3 and clause 63: Clause 3: Facebook completed the acquisition of GIPHY on 15 May 2020, but has been required to hold the businesses separate since 9 June 2020, when the CMA imposed an Initial Enforcement Order (which was amended by a Variation Order on 29 June 2021). Clause 63: As noted above, we have decided that the sale of GIPHY is the only effective remedy to the SLCs that we have found. While divestiture of the acquired business is not an uncommon outcome when the CMA finds an SLC, divestiture of the GIPHY business poses particular challenges arising as a consequence of the completion of the Merger, and Facebook’s related actions, namely the termination of GIPHY’s revenue function and team, the transfer of almost all GIPHY staff on to Facebook employment contracts and the transfer of GIPHY’s back office functions to Facebook. These actions took place prior to the CMA issuing its Initial Enforcement Order holding the Facebook and GIPHY businesses separate and mean that, in several respects, GIPHY is in a significantly weaker position than it was pre-Merger. https://assets.publishing.service.gov.uk/media/61a4bfa2e90e07044a559d57/Facebook_GIPHY_-_Summary_of_Final_Report.pdf https://assets.publishing.service.gov.uk/media/61a4bfa2e90e0...

taxyz23 5y ago

I guess I don't get it. This is based on speculative misuse - that FB may in the future deny access to Giphy to competitors. So if you own a tool that your competitors may use then that's anti-competitive? Seems like that could apply to a lot of companies. Why not wait for actual misuse and base a case on that? Also what's so special about Giphy? Seems it could be duplicated fairly easily by any serious competitor. And competition being defined as other social media platforms? Pretty broad definition. Seems FB hatred is making bad law. And that bad law will bite others not just FB.

LatteLazy 5y ago
The current UK government is very corrupt. The issue here is that someone at FB missed their request for a "donation". I'm sure this can all be sorted for a low 6 figure sum...
- ddek 5y ago
  This is a regulator, not a political appointee or contracted agency.
  - LatteLazy 5y ago
    Im not quite sure what you mean. In the UK system everyone is a political appointee. Just how blatent a PM is about interfering in "independent" agencies depends on the PM. And Boris literally just sacked the head of the standards commission and dissolved it to save a political nobody who isn't even needed to shore up a majority. There is no separation of powers here, as long as the PM is the PM, he is basically god.
- pjc50 5y ago
  Facebook literally employ the former deputy Prime Minister.
  - LatteLazy 5y ago
    Yeah, but he was never really "in" with the current lot (not corrupt, different political party, not an old boy) and he hasn't been part of a government for 7 years. It's time for a new hire/donation/whatever

pmontra 5y ago

> Meta argued that the regulator was “sending a chilling message to start-up entrepreneurs: do not build new companies because you will not be able to sell them.” This overlooks the traditional and perhaps now unpopular reason to start a company: making money by selling something useful. No need to sell the company. By the way, Facebook buys, does not sell.

notahacker 5y ago
Ironically, that statement is the strongest argument in favour of blocking the acquisition I've heard. Any company so arrogant about its market dominance it assumes that the only way for an entrepreneur to succeed in building a company in its market is to sell to them deserves to be broken up.
- paulcole 5y ago
  I think that's the only way for a gif hosting/copyright infringing platform to succeed. https://medium.com/@pasql/giphy-is-stealing-from-artists-689177b20c08 https://medium.com/@pasql/giphy-is-stealing-from-artists-689... Other companies that exchange money for goods and services might have better luck.
- Spivak 5y ago
  Or ya know, that startups talk about having an exit that's either getting bought by someone or an IPO. Nobody in the startup world seems terribly interested in building a lifestyle business.
  - dd36 5y ago
    The media only talk about companies with investors. Investors want exits. Investors influence the media to talk about companies they’re invested in.
    - jimnotgym 5y ago
      Or the intermediary making money out of the investors want exits, and only get paid when a deal moves through. For many investors they need neither exits, dividends or anything other than capital growth.

dazc 5y ago

Remedies proposed by Facebook, such as a promise to keep the service open to rivals, were not sufficient to address the competition concerns, the regulator added. https://www.telegraph.co.uk/business/2021/11/30/facebook-ordered-sell-giphy-competition-watchdog/ https://www.telegraph.co.uk/business/2021/11/30/facebook-ord... They would break a promise - surely not?

Hamuko 5y ago
>They would break a promise - surely not? What, again?
chippiewill 5y ago
> They would break a promise - surely not? I think the CMA stopped listening to promises from US companies after Kraft completely reneged on their takeover of Cadburys.

boh 5y ago

It's just open season on Meta and big tech in general. Giphy isn't exactly an ad powerhouse nor a real competitor to Meta, but any acquisitions are now opportunities for political theater.

thesuitonym 5y ago
True, but perhaps big tech shouldn't be so big. If Facebook's mergers had been under this much scrutiny in the past, the web would probably be a better place today. It's too little too late, but it's not exactly a witch hunt.
YXNjaGVyZWdlbgo 5y ago
Giphy is and was always just a metadata aggregator with the side effect of hosting funny little copyright infringing videos.
- dylan604 5y ago
  They are not infringing copyright. They definitely qualify for use under several parts of the copyright law.
  - llacb47 5y ago
    You mean fair use, and not necessarily. Also "fair use" is not a law in the U.K.
    - dylan604 5y ago
      Works used for satirical work are allowed. Seems like what these are being used for.
      - detaro 5y ago
        Parody is fair use. Satire usually isn't. And I'd doubt most use of e.g. posting gifs on social media in response to something counts as "satire".

game_the0ry 5y ago

Western, mostly UK an EU, regulators are dumb. They wanted to help their citizens with privacy, instead the whole world gets annoying cookie pop ups. Boomer energy is too strong in the Western world.

funshed 5y ago
The UK government is considering withdrawing the requirement for consent to cookies from UK law. To be clear this was an EU Import into UK regulation.
- game_the0ry 5y ago
  It was an import to US regulation as well.

whalesalad 5y ago

Imagine a government across the world asking you to sell a portion of your business. I’m not a fan of FB but I’d be laughing with Zuck in the board room at this one.

Denvercoder9 5y ago
It's not a random government across the world. Facebook does business in the UK market, has an office and personnel in the UK, and has customers in the UK.
- voidfunc 5y ago
  How relevant is the UK mow that it has exited the EU? If I am Facebook I pull out of the UK or at least threaten to do so. The general public will scream at their MPs to fix the problem.
  - colinmhayes 5y ago
    Downvoted but I think you're right. If Facebook calls their bluff here it's going to be extremely politically unpopular to actually shut them down.
    - blibble 5y ago
      remember: traditional media hates facebook there would be wall to wall coverage about facebook deciding the law doesn't apply to them
      - colinmhayes 5y ago
        And plenty of people hate traditional media. THere would be wall to wall ads from facebook about how they're being mistreated by the jealous traditional media and corrupt government.
        Apocryphon 5y ago

sebow 5y ago

While seeing FB, Twitter, Google,etc. get hit by regulators & governments doesn't really bother me (because these monopolies should be getting attacked, not necessarily for the fact that they're monopolies but because they behave in an anti-competitive, scummy way, to mention only one reason), what i do wonder is how exactly does this pave the way for new emerging platforms that are more secure, less censored and better designed than these ones.Especially when you consider the amount of regulations one has to "obey" when launching a new platform. While it's certainly easy to cite few companies that have better ethics than these major corporations, the attacks of EU&US regulators&politicians feel like it's just both a money-grab and also political talk in order to restore "trust in institutions"(Which is down-trending in EU since 2015 for example) while degrading the influence of these platforms (which again, it's not a bad thing, just an over-looked fact).

cletus 5y ago

I can't help but think of Aesop's fable about the goose that laid the golden eggs. That goose is the tech industry and what may kill it is pointless, kneejerk political or regulatory action. In the social media space, if Facebook has such a monopoly, why have there been a number of competitors that have come along and represented an existential threat in the same way Facebook did to Myspace? Examples: Instagram, Twitter, Snapchat and Tiktok. But this regulatory ruling isn't even about Facebook's dominant business, it's about the potential harm to the advertising business from a $30m easyily-reproducible company. Sure, Giphy had a lot of installs but it's not even the only such company in this space (eg Tenor? IIRC). And if you're going to go after a company for dominance in advertising and you go after Facebook and not Google? How does any of this make sense? These companies are also facing competition from competitors who aren't and won't be shackled by the threat of government intervention. Instead, those companies are extensions of the state. I am of course talking about China and the likes of Tencent, Alibaba, Tiktok and so on. So I'm confused by this move because it seems ultimately pointless. Anyone claiming it's "sending a message" miss the point that this cuts both ways. It can embolden those who oppose regulation as government overreach and this may hurt actual anticompetitive practices rather than potential anticompetitive practices. All around, this just seems so... dumb.

Teandw 5y ago
1) "But this regulatory ruling isn't even about Facebook's dominant business, it's about the potential harm to the advertising business" Yes, using it's dominance to control a market and decide where people get to advertise, rather than people having a choice. 2) If you think Giphy is easily-reproducible, it shows how little you know about things in general. 3) "And if you're going to go after a company for dominance in advertising and you go after Facebook and not Google?" 1 minute of research would show you that the CMA already are and have been at Google's doors too. More recently about Google's power when it comes to third-party cookies; which is for advertising. The CMA are pretty much always going at the big companies for something. It seems like you need to understand what you're talking about, before you try and talk about it.
- jimbob45 5y ago

benja123 5y ago

Honestly I don’t think this will end well for the regulator. I am not a lawyer, but I am guessing that if Facebook blocks giphy usage in the UK there is very little the UK regulator can do to them. I see that as the likeliest scenario as they won’t want to sell giphy. This will only make the regulator look foolish. The average person won’t understand why Facebook owning giphy is a problem (it’s not a social network) but they will be annoyed when they lose access to giphy in slack, WhatsApp and other platforms that use it in.

klelatti 5y ago
So FB harms their UK business and gets a big fine. UK FB goes without GIFs - not a huge deal!
- danuker 5y ago
  > without GIFs I'd say they're not GIFs, they're embedded mini-websites with their own tracking cookies and JS and whatnot. If only they were GIFs.
  - klelatti 5y ago
    Good point!
  - viro 5y ago
    thats not how gifs work ffs
    - Nextgrid 5y ago
      Giphy is much more than a GIF though. Here's a link for example: https://media0.giphy.com/media/mlvseq9yvZhba/giphy.gif https://media0.giphy.com/media/mlvseq9yvZhba/giphy.gif If you load it in a browser you get an entire HTML page full of spyware - it is not a GIF. They're detecting the user agent and deciding whether to send spyware or not - only curl'ing the link gives you the raw GIF by the looks of it.
5y ago

callamdelaney 5y ago

Oh, it means facebook.

deleted 5y ago

[deleted]

AltruisticGapHN 5y ago

I don't know anything about these laws and companies so forgive my silly question but... what about Giphy's responsibility? Can be bought against their will? Or do they sell just to cash in? Because if they do it sounds to me like they have no better morals than Meta.

throwthere 5y ago
When Facebook bought giphy like any other buyers the buyer assumes all liabilities.

paxys 5y ago

So, they want to be paid off. The standard EU/UK MO.

deleted 5y ago

[deleted]

literallyaduck 5y ago

How about holding Facebook responsible for the stolen IP available on Giphy with the same fervent prosecution which was shown to the Love Guru pirate?

gorgoiler 5y ago

It seems odd for the CMA to order a sell off when Facebook and Giphy are both US companies. Wouldn’t it make more sense to require Giphy UK to cease trading, and force Facebook UK to compete on its own? UK authorities policing UK companies and all. (Please don’t respond to this as a hot take on globalisation — my comment is a serious question about how the UK competition authority can be most effective, not a wide eyed lamentation on why we can’t have world peace etc.)

avianlyric 5y ago
Facebook is free to stop operating in the UK if it wants. If wants to continue operating in the UK, and retain ownership of Giphy, then any UK based assets they have (such as revenue from UK business) will probably end up being forfeited via fines from the regulator.
- gorgoiler 5y ago
  Cmon. They have a huge engineering office there bringing in massive amounts of tax revenue already. UkGov doesn’t want to chase off 1000x employees bringing in £100M of income tax revenue. FB’s VAT on ad sales in the UK is probably only £500m.
  - funshed 5y ago
    Facebook paid just £28.5m in UK corporation tax in 2018, despite record £1bn in UK Sales.
    - gorgoiler 5y ago
      Once again, cmon. Facebook has a significant and legitimate cost centre in Menlo Park, CA. As in, sure, FBUK sell ads, but the value is backed by a 4billion eyeball set of social networks that didn’t just build themselves.
  - joshuaissac 5y ago
    > FB’s VAT on ad sales in the UK is probably only £500m. It is probably closer to £0. VAT is only chargeable on non-business ad sales. Where a Facebook does pay VAT for a sale to a business, that cost is passed on to the buyer, which can claim it back from HMRC. The exception being very small businesses that are below the VAT registration threshold.

arenaninja 5y ago

Do Amazon next thanks

mullingitover 5y ago

Bold move for a declining country like the UK to pull a business-hostile move like this. Meta could probably just pull out of the UK entirely without any serious bottom line impact. You'd think the UK would be pulling an Ireland and throwing around tax shelter bargains and generally offering sweetheart deals like there's no tomorrow. Trying to bully businesses they desperately need is...brave.

BeFlatXIII 5y ago
How much tax revenue to Meta bring to the UK? Perhaps they're better off without each other.
parasense 5y ago
> Bold move for a declining country like the UK Agreed Not sure why the UK regulators are even concerned about the Giphy deal, it's small time... like, compared to the Nvidia + Arm deal. > Meta could probably just pull out of the UK entirely without any serious bottom line impact. Not sure about that, but there are plenty of options. Meta probably needs data-centers in the UK, but those could in theory move to Ireland at great expense, probably at far more expense than the Giphy deal was worth. Then comes the issue of Facebook employees in the UK, and to what extent their jobs contribute to the UK economy, and what impact that would have for those jobs to move to another country. I'm not sure regulating Facebooks' small-time deals like Giphy is worth the potential risk of losing Facebook in the UK. Another potential way forward would be to sell Giphy, then create new Giphy-like business unit. I'd argue this is perhaps the least expensive way forward, costing more than it was to buy Giphy, yet much less than the cost of moving UK operations out.
funshed 5y ago
You should vary your press, the UK is booming. The unemployment rate is lower than pre-pandemic at 4% with wages growth to match. The OECD thinks the UK economy will expand 6.7 per cent in 2021, the highest rate of growth among the G7. UK is in the top 10 higher number of facebook users.

deleted 5y ago

[deleted]

HDHGVJKBJU 5y ago

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4monthsaway 5y ago

I'm sure Zuckerberg is hard at work thinking of how to start his own government soon enough

jldugger 5y ago
Well, he's already started his own supreme court... https://theconversation.com/why-facebook-created-its-own-supreme-court-for-judging-content-6-questions-answered-160349 https://theconversation.com/why-facebook-created-its-own-sup...

a-dub 5y ago

good to see that post-brexit britain is remaining just as relevant as ever...

worker767424 5y ago

I don't know what Giphy's financials looked/look like, but it felt like the type of startup that could only ever run on VC funding to eventually be bought up by a larger player. I'm not convinced there's a self-sustaining business, there.

someonewhocar3s 5y ago

AFAIK Giphy is of little to no consequence, with no business case except through spying (ie generic signals value) It sends mostly copywrong funny little animations along with text messages, on every service that cannot be thought to be very secure. Facebook here is arguing correctly that for most of these 'people use it and it's somehow social' the only business cases come out of combined signals intelligence, or there may be investors that simply care about time spent with a service or total customer volume. Facebook's engagement stats etc. are thusly valueable that there is a business case at all. What value is it, if it weren't some sort of hedgemony being build? "will also be required to reinstate the innovative advertising services that Giphy offered before the merger." UK is very funny! It does not understand 'computer' that well yet, but now it commands what's probably the most exploitative/derogatory/negative component of Giphy to be reinstated! Such savvy government activities. Certainly, this will 'materially' impact the advertisement market, hahaha!