Home » CMA blow for Facebook owner Meta Platforms

CMA blow for Facebook owner Meta Platforms

by LLT Editor
2nd Dec 21 11:28 am

The CMA has published a report into the merger of Facebook and Giphy which has seen shares in Meta Platforms tumble.

It’s a bold step the UK’s competition watchdog has taken and one that will certainly demand tech companies sit up and pay attention. Neither Giphy nor Facebook’s parent company Meta are based in the UK but the fact so many UK residents use both social media sites has prompted them to jump in with both feet.

The competitions and markets authority has said it can see no other way to protect the interests of the consumer and despite the fact the deal is done, is demanding it be reversed. There are a number of intriguing firsts for investors and company bosses to get their heads around, one of the most interesting is potential. Giphy might not be a direct competitor to Facebook yet, but the potential that it one day could be is just one of the issues picked out in today’s report.

Danni Hewson, AJ Bell financial analyst, said: “Meta will undoubtedly consider a challenge to this ruling; it’s got skin in the game and months of integration to unravel if it is forced to sell. Then there’s the potential impact it could have on small tech start-ups looking to scale up by being snapped up by a competitor. It’s a tried and tested formula and often the only smart way for a business to grow. Tech companies understand the next decade will bring greater scrutiny, particularly those that have mushroomed into behemoths with power and influence. This move by the CMA will make headlines, but the most important words will be spoken in boardrooms and over video links as tech bosses work out exactly how strong these regulators muscles are and whether the decision will set a precedent other regulators will seek to follow.

“The news has seen shares in Meta Platforms fall in early trading as investors work out what the sell-off would mean for the social media giant which bought the business back in 2020 for a reported $400 million.”

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