Why Meta Platforms Stock Dropped Today
Shares of Meta Platforms (NASDAQ: FB) -- the artist formerly known as Facebook -- tumbled 3.5% in Tuesday afternoon trading, as of 3:20 p.m. ET, after Reuters reported that Britain's Competition and Markets Authority (CMA) has ordered the company to divest itself of the popular GIF website Giphy.
Facebook (as it was still known at the time) bought Giphy last year in a deal valued at $400 million, giving itself and its users potentially exclusive access to the company's library of GIFs (short for the Graphics Interchange Format files used to post short, animated images on social media sites). To date, neither Facebook nor its Meta Platforms parent company have prevented users of rival social networks such as TikTok or Twitter from accessing Giphy GIFs on their own sites. But the CMA is concerned that Meta Platforms might make such a move in the future, arguing that "the tie-up between Facebook and Giphy has ... removed a potential challenger in the display advertising market."
Moreover, the CMA noted that it had ordered Facebook to postpone buying Giphy while it was examining the proposed deal -- an order that Facebook apparently ignored, resulting in a $70 million fine from the CMA.
Source Fool.com
