Meta Platforms Inc. today said it has agreed to sell Giphy Inc. to Shutterstock Inc. at a huge loss after it was ordered to divest the company on competition grounds.

Meta, then known as Facebook, acquired Giphy, the startup behind the GIF animated image sharing platform of the same name, in May 2020 for $315 million. Giphy makes money by allowing companies to create branded GIF images that consumers can use in services like WhatsApp, Instagram and Messenger.

Given how popular Giphy was among Meta’s various services, it seemed like a natural acquisition for the company, but it didn’t take long for competition concerns to be raised.

A month after the acquisition, the Competition and Markets Authority, the U.K.’s antitrust watchdog, announced it had opened an inquiry into the deal. The inquiry was tasked with investing whether the deal led to “a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

In August 2021, the Competition and Markets Authority indeed found that the acquisition lessened competition. That November, the regulator directed Meta to unwind the purchase.

Shutterstock, best known as a provider of stock photography, footage and music, has arguably picked up a bargain. Reuters reports that the acquisition price for Giphy was $53 million in cash, some $262 million less than what Meta had paid for the company three years before.

“Through the GIPHY acquisition, we are extending our audience touch points beyond primarily professional marketing and advertising use cases and expanding into casual conversations,” Shutterstock Chief Executive Paul Hennessy said in a statement. “We plan to leverage Shutterstock’s unique capabilities in content and metadata monetization, generative AI, studio production and creative automation to enable the commercialization of our GIF library as we roll this offering out to customers.”

The bargain is also apparent in Giphy’s numbers. According to Shutterstock, Giphy has 1.3 billion search queries daily and powers more than 15 billion daily media impressions. Although those numbers don’t necessarily equal profitability, it’s a massive base of users for Shutterstock to work with.

The acquisition is expected to close in June, with Shutterstock saying that the acquisition would add “minimal revenue in 2023.”

Image: Giphy