Sources: before its acquisition by Facebook, Giphy paid investors a dividend, reducing its value and ensuring antitrust officials did not need to be notified
- Mergers that raise competition concerns are going unreported — Findings complicate Biden plan to boost antitrust enforcement Tweets: @bdsams , @saraforden , and @kajrozga Tweets: Brad Sams / @bdsams : Very legal, very cool https://twitter.com/... Sara Forden / @saraforden : Is the system for reviewing mergers for antitrust violations broken? https://www.bloomberg.com/... Kaj Rozga / @kajrozga : Nice @damclaugh piece on “stealth” deals — M&A falling below the radar of #antitrust authorities due to low transaction value. #BigTech may have awoken a sleeping dragon, as regulators and lawmakers look for ways to require more deals to be screened. https://www.bloomberg.com/...
Context & Ripple Effects
Facebook's Giphy acquisition was never reviewed by US antitrust officials at closing because the deal's reported value fell below notification thresholds — and Bloomberg now reports Giphy engineered that outcome by paying investors a dividend that shrank its value first. The playbook has a precedent in Google's purchase of Invite Media, which reportedly slimmed assets for the same reason and is among the deals the FTC is re-examining.
The timing is awkward on both sides of the Atlantic: the UK's Competition and Markets Authority had already opened an investigation into the Giphy deal, and the FTC's broader probe of Facebook — covering whether it bought startups like Instagram and WhatsApp to neutralize rivals — was expected to roll into the new administration, complicating the Biden administration's plan to tighten merger enforcement.
First-order effects
- Facebook closed a competitive asset purchase without US antitrust notification, meaning regulators never got the chance to review or block it at the time — Giphy's investors took the dividend instead of a larger sale price.
Second-order effects
- The FTC's existing Facebook probe, already examining whether Instagram and WhatsApp were acquired to neutralize competitors, gains a concrete example of deal structuring that bypassed review, strengthening its case file while the UK CMA runs its own parallel Giphy investigation.
Third-order effects
- If dividend-stripping proves to be a repeatable template — as the Invite Media precedent suggests — expect regulators to push for value-based thresholds that capture structured-down deals, forcing acquirers to either report more transactions or defend the structures publicly.
The trend: Big Tech acquisitions are increasingly structured to fall below antitrust reporting thresholds, turning post-hoc investigations by bodies like the FTC and CMA into the de facto review mechanism.