FACEBOOK’S owner Meta will seek to overturn a legal ruling by Britain’s competition authority requiring it to drop its planned merger with online GIF creator Giphy on Monday.

The Competition and Markets Authority (CMA) last November found Meta’s US$400 million (RM1.7 billion) proposed takeover of Giphy, which supplies animated GIFs or mini videos to major social networks, will give the United States behemoth too much market share.

The proposed deal was announced in May 2020, but a provisional ruling from a CMA probe found a sell-off is required to allay competition concerns, not least as a merger will remove a potential competitor from a market worth an estimated £7 billion (RM38.8 billion) value.

Facebook is already, by far, the biggest player in the market, and the CMA said both competition and innovation are liable to be hit if the merger is waved through.

Meta appealed what it terms a “disproportionate” and “unfair” ruling, claiming “extraterritorial over-reach” by the British authorities.

The case will now go ahead in the Competition Appeal Tribunal in London.

The case will open on Monday and is expected to last the week, with a subsequent ruling expected. But that decision can also theoretically be appealed.

Meta wants to seal an acquisition which will be a means of integrating its photo and video-sharing social networking platform Instagram with Giphy’s huge library of resources.

The regulator fined Meta £50.5 million in October and a further £1.5 million in February for not respecting obligations including a requirement to show it is keeping Facebook and Giphy’s businesses separate for the duration of the case.

Giphy, created in 2013, is a platform and search engine for “stickers” and other products using the graphics interchange format or GIFs. It has some 700 million daily users. – AFP, April 23, 2022.