Britain’s antitrust watchdog ordered Facebook parent Meta Platforms Inc. to sell Giphy, the first time a global regulator has forced a Big Tech firm to unwind a completed deal. A turnaround after years of being allowed to swallow up smaller rivals with virtually no push back.

The Competition and Markets Authority found that last year’s $315 million tie up with the GIF search engine will reduce competition between social media platforms, according to a statement Tuesday.

It’s the first time a Big Tech firm has been ordered by regulators in Europe and the U.S. to undo an acquisition rather than pay a hefty fine. Meta now has two choices: to appeal or divest.

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.

Meta now has two choices: to appeal or 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, a court process that looks at how the CMA came to its decision. If Meta accepts the CMA’s ruling it will have to find a suitable buyer that will be vetted by the regulator.

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

High-Risk

Closing a deal without approval can be a high-risk strategy. The EU may fine Illumina Inc. as much as $400 million for completing a deal without permission. Google closed its Fitbit takeover earlier this year without getting U.S. or Australian permission. Australia is conducting an enforcement probe into that deal.

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.

Both sides have battled 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.

Other global regulators have not shown as much concern with the deal. Margrethe Vestager’s European Commission didn’t review the case, while Austria’s competition agency is still reviewing it.

—With assistance from David McLaughlin.