7 ms·

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

by 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]

by akamhy 5y ago

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]