The UK's antitrust regulators said that Meta must sell Giphy, the company it bought for $400 million in May 2020.
The Competition and Markets Authority concluded that the acquisition of Giphy by Facebook would reduce competition between social media platforms and that it had already removed Giphy as a potential challenger in the display advertising market.
The merger could give Meta the power to limit or block other social media platforms.
Meta could require rival social media platforms to give user data in exchange for access to Giphy, it was said.
Meta had effectively removed a competitor in the display advertising market by buying Giphy.
Giphy's advertising services were terminated by Facebook at the time of the merger. The UK's display advertising market is worth nearly $9 billion and Facebook controls half of it.
In a statement sent to Insider, Meta said it did not agree with the decision.
We are considering all options, including an appeal. The support of our infrastructure, talent, and resources is better for both consumers and GIPHY.
GIPHY would be enhanced by Meta and would provide more choices for everyone, in the UK and around the world.
The ruling was in line with the finding issued in August. The merger was announced in June 2020.
The day before the ruling was issued, Prof. Greg Taylor, an associate professor of economics at the Oxford Internet Institute, said a ruling to reverse the Giphy acquisition could mark a "line in the sand" for Big Tech regulation.
It's not unusual for mergers to be blocked or have some sort of remedy imposed upon them, even outside of the tech world. Despite the fact that they've acquired hundreds of firms in the last couple of decades, there's been almost no major intervention to prevent the merger by one of the major tech firms.
Lawmakers have been scrutinizing Meta's acquisitions over the last few years. The company should be broken up according to the chair of the US House antitrust subcommittee.
