On Tuesday, Shutterstock announced that it would be purchasing Giphy away from Meta Platforms, which will mark the last step in the anti-trust suit that was filed by regulators in the UK.
The deal will be for $53 million, and will conclude the “unwinding” of the deal that regulators in Britain blocked. It essentially prevented the owner of Facebook from buying the platform that allows people to share GIFs. The regulators had major concerns about competition.
Shutterstock said it would be paying for Giphy in cash. The platform has 1.7 billion daily users and has some impressive social media partners such as WhatsApp, Facebook and Instagram – which are all owned by Meta Platforms – as well as Twitter and TikTok.
The deal that Shutterstock announced will still give Meta continued access to the content on Giphy across all of the platforms that Meta owns.
Shutterstock CEO Paul Hennessy issued a statement this week that said the acquisition of Giphy would help the company expand its reach “beyond primarily professional marketing and advertising use cases [and] into casual conversations.”
Right now, the transaction could close in June. Once it does, Meta could experience a huge financial loss. That’s because the company bought Giphy for a reported $400 million back in 2020. That means it could essentially lose almost $350 million due to the British regulators blocking the deal.
The anti-trust investigation was opened by the Competition and Markets Authority in Britain, as it was concerned that the deal would ultimately result in “substantial lessening of competition” in the United Kingdom for GIFs, which are short videos that loop automatically.
Internet users often use them as ways to send messages to people they know or even post on their own social media pages.
In 2021, the competition watchdog in Britain ordered Meta to figure out a way that they could reverse that deal that they signed with Giphy. Not surprisingly, Meta appealed that decision, but they lost.
The watchdog group in the UK concluded that “the only way to avoid the significant impact the deal would have on competition” would be for Meta to dump off Giphy to a buyer that was approved by the agency.
The Associated Press reached out to Meta to get a comment on the Shutterstock acquisition, but company officials declined to comment any further. Instead, they referred to a statement the company put out in October that said they were disappointed with the decision in the UK, but they were accepting of it as the “final word on the matter.”
In addition, the statement said that Meta would “continue to evaluate opportunities – including through acquisition – to bring innovation and choice to more people in the UK and around the world.”
The watchdog in the UK said that the Giphy deal would ultimately boost traffic to all of the sites that Meta owned while also limiting or outright denying access to the GIFs produced on Giphy to other online platforms.
