Facebook owner Meta has given up its fight against the U.K. government's insistence that it sell animated picture platform Giphy, agreeing Tuesday to unwind its acquisition of the New York-based firm on the orders of the foreign regulator.
The U.K.'s antitrust watchdog, the Competition and Markets Authority (CMA), this week re-affirmed its ruling from last year that Meta's purchase of Giphy would stifle competition and innovation.
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Meta said it would not issue another appeal of CMA's decision.
"We are disappointed by the CMA’s decision but accept today’s ruling as the final word on the matter," a Meta spokesperson told FOX Business in a statement. "We will work closely with the CMA on divesting GIPHY."
The spokesperson added that Meta "will continue to evaluate opportunities – including through acquisition – to bring innovation and choice to more people in the UK and around the world."
Meta announced it was buying Giphy in May 2020 in a deal reportedly worth $400 million. But the CMA moved to block the acquisition in November 2021, saying the purchase would allow the social media giant then known as Facebook to "increase its already significant market power."
Meta appealed the decision, saying at the time, "The decision to block the deal is wrong on the law and the facts," arguing that its purchase of Giphy would actually improve Giphy's products and provide "more choices for everyone."
The CMA's move against Meta and Giphy raised alarms for American business groups who question the U.K. government's authority to step in on a deal between two U.S. companies.
"This foreign action to block acquisition activity of two U.S.-based companies is unprecedented, and startling," Small Business & Entrepreneurship Council president and CEO Karen Kerrigan said in a statement following CMA's ruling last year.
"America’s dynamic and productive startup ecosystem is the jewel of the global marketplace, and the U.K.’s bold overreach directly undermines our innovative and investment environment," Kerrigan continued. "This is a serious matter for the Biden administration and Congress to address, as the U.K. Competition and Market Authority’s action could snowball and cause disruption for a broad range of U.S. sectors, as well as the health of global entrepreneurship and functioning of capital markets."
The Associated Press contributed to this report.