Gen Z’s dislike of gifs is threatening our future, says Giphy

Gen Z’s change in taste has led to its love of “cringe” animated files, threatening the future of tech company Giphy if it forced to reverse the takeover by parent company Facebooksaid the bosses.

A business that enables users share animated gifs through messaging apps, said it had suffered a decline since it was taken over by Meta in a deal worth $315m (£272m) in 2020.

In a letter to the Competition and Markets Authority (CMA), Giphy claimed its meme-sharing product had “fallen out of fashion as a content form, with younger users in particular describing gifs as ‘boomers’ and ‘cringe’.”

The CMA argued that Meta’s takeover of Giphy harms competition by blocking innovation in advertising. It ordered them to tear up the deal.

Meta argued that Giphy’s business was in danger of collapse before the takeover. Last month, a court halted the CMA’s forced sale of Giphy after finding that regulator Meti had failed to provide adequate disclosures ahead of the final report.

The regulator must resubmit its report before it can require completion of the divestment.

Giphy, however, warned the regulator that its business had weakened in the two years since the takeover was announced and it could struggle to find another buyer. He added that any sale would involve “considerable risks”.

Younger Internet users stopped sharing so many of his gifs, the company said. The CMA investigation also prevented it from making any money from the merger with Meta.

Giphy added that its advisers JP Morgan have already tried to sell their company to Amazon, Apple, Snap, Twitter, TikTok owner ByteDance and Adobe. After the first talks in 2020, they all refused to buy.

The CMA’s efforts to break up Giphy and Meta are the first time it has ordered a major tech company to halt a takeover, as it clamps down on mergers that regulators believe could harm future innovation.

Competition authorities have taken an increasingly hard line on tech takeovers after failing to intervene in critical mergers such as Google’s $3 billion takeover of Doubleclick in 2007, which turned it into an advertising giant, and Facebook’s deal for Instagram.