(Bloomberg) -- The U.K.’s antitrust watchdog said that Facebook parent Meta Platforms Inc. must sell all of Giphy to address competition concerns, in the latest blow against big tech from regulators.

The Competition and Markets Authority concluded its in-depth probe into the completed merger and found the deal would reduce competition between social media platforms, it said in a statement Tuesday. It had initially come to this conclusion in provisional findings published in August.

“We disagree with this decision,” a Meta spokesperson said. “We are reviewing the decision and considering all options, including appeal.” 

The watchdog said the deal had already removed the platform as a potential challenger in the display advertising market and that Meta must sell Giphy in its entirety to an approved buyer.

“Without action, it will also allow Facebook to increase its significant market power in social media even further, through controlling competitors’ access to Giphy GIFs,” Stuart McIntosh, chair of the investigation, said. 

The $315 million deal for Giphy, completed last year, raised concerns from U.K. regulators from the beginning. The antitrust probe was initially delayed after officials ordered Facebook to pause plans to integrate the company, sparking a lengthy court battle. 

Appeal or Divest

Meta now has two choices: to appeal, or to divest. The company will be able to appeal the decision to the U.K.’s Competition and Appeals Tribunal where it would be heard as a judicial review, not on whether the decision was right or wrong. If Meta accepts the CMA’s decision it will have to find a suitable buyer that will be vetted by the regulator. 

Both sides have knocked heads during the merger review process. The CMA fined Meta 50.5 million pounds ($68 million) for failing to update regulators on efforts to hold Giphy separate before getting U.K. merger approval, which Meta later did not appeal. While Meta has accused the CMA of being disproportionate and failing to offer it alternatives to divestiture. 

Merger watchdogs across Europe are giving U.S. tech giants a much tougher time as they investigate their market power. Regulators faced a barrage of criticism for allowing Silicon Valley to snap up potential rivals before they make it big. Facebook’s game-changing takeover of Instagram is often cited as a deal that was waved through by regulators without proper scrutiny.

(Updates with more detail in paragraphs six to nine)

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