Meta to sell Giphy at $260 million+ loss

Ordered to sell by UK's competition regulator

In the same week as being hit with a $1 billion fine, Meta has agreed to sell GIF platform Giphy to stock image platform Shutterstock for $53 million: more than $260 million less than it paid for the platform just three years ago.

Meta paid between $315 million and $400 million for Giphy in 2020. The UK's competition regulator, the Competition and Markets Authority (CMA), ordered Meta to divest itself of the platform the next year, due to competition concerns.

Meta appealed the ruling, but the CMA held firm and renewed its order in October.

The CMA was specifically concerned that Meta could limit other social media platforms' access to Giphy's large media library.

Ironically, Meta has now had to sign a deal to continue using Giphy's API.

It was the first time a regulator had forced a US tech firm to sell an already acquired company. The CMA has since stepped up its regulatory efforts, restricting or blocking other tech firms' deals.

Shutterstock has said Giphy will add "minimal" revenue this year. It will launch efforts to raise revenue using the platform next year.

Shutterstock CEO Paul Hennessy called the acquisition "an exciting next step" for the company.

The deal is expected to close next month, subject to customary closing conditions.

Meta is not only out the $262 million loss from the sale. It is also down more than $71 million from two fines the CMA imposed in October 2021 and February 2022, for going through with the acquisition without approval.