Okay, I'm dumb. But can anyone please explain how the UK has any right to stop an American Company(Meta) from acquiring another American Company(Giphy)? If the UK can, can Germany, India, or even China and Russia do something similar?
We can assume for certain, I think, that UK regulators operate within a set of rules, and in many cases they will not have the power to interfere with an acquisition between two foreign businesses - for good reason. Regulators in other countries may not have the power to stop this particular deal in the first place.
Maybe the powers of UK regulators need to be further restricted.
The interesting discussion to be had here is about what good policy is, not to say "A country can make whatever laws it likes". Well duh.
We all have an interest in a functional global system. To that end, it is beneficial of countries at times defer to the laws of other nations (https://en.wikipedia.org/wiki/Comity). Maybe this is such a case. Possibly we would prefer not to have other countries try to interfere with mergers happening without our own jurisdiction too often.
As an American citizen, would you want to restrict regulators from being able to block the business of a company that merged with a CCP controlled company in China?
On what grounds would that business be blocked?
On grounds having being state controlled? I'm not sure US regulators do have that power. On some pretend grounds, to be able to wield it as a geopolitical weapon? Probably not.
On some narrow national security reasons? Maybe.
Any grounds pertinent to American interests, frankly.
overall, the Commerce Clause in article I of the US constitution grants the federal government power to regulate commerce with foreign nations, which includes import / export restrictions. For example you can't really buy things from Iran or Cuba without major restrictions if at all.
if a trade embargo doesn't fall under the realm of "geopolitical weapon" I don't know what does.
My overall point is that details matter for good policy. A regulator having the power to ban a foreign merger for supposed anti-competitive reasons, but really political ones, is not the same thing as, say, a legislative body passing sanctions legislation.
In other words, just because the UK wants to ability to sanction a Chinese business does not mean the Competition and Markets Authority needs to granted the ability to interfere with Chinese mergers.
How much more geopolitical do you have to get? You've been trying to starve an entire country for more than half a century because a bunch of your citizens are pissed off they got kicked out of there 30+ years ago and your politicians need them to win vital nation-wide elections.
Yes, I know about all the Cuban abuses and all that other garbage, but that doesn't make it right because the US is allied to <<soooo>> many other human rights violating countries and it doesn't even bat an eye.
If the US wants their regulators' decisions to carry weight in another country, they can pay for the privilege via trade agreements, same as it ever was.
Companies are a tool that should serve the public, if they cease to serve the public, they should be bought in line, destroyed, or (as is threatened in this case) exiled. A democracy is meant to be for the people, not for profit. Profit is just a motive to try and incentivise things that are valuable for society, when that isn't achieved, regulators should step in to fix it.
Companies that are too large have too much money, and too much power. They are inherently anti-consumer and cause harm to the very fabric of democracy. In any sane world, we would be breaking up a huge number of these large corporations into much smaller pieces.
The electorate has a responsibility to protect democracy and not let companies break the law of the land, they have no responsibility at all to companies.
The sovereignty of the United Kingdom over its own territory and incorporated businesses, through laws created by the British parliament which derives its power from the British people, very straightforward.
And if you think the British people are more sympathetic to Facebook than the British regulators you have another surprise coming
Whether a business is foreign or not is irrelevant as far as its operations in the UK is concerned. Do you think Chinese owned businesses in the US don't have to comply with American law on American soil?
I imagine since jaywalking is legal in the UK (but not in the US) you have similar comments? How could there be a different law about the same topic in different countries!
How is this any different to “in country X there are Y laws”. Giphy could be from Mars and it would make no difference.
Giphy isn't necessarily a direct competitor (and we might disagree with the UK regulators on their assessment of the merger), but just shutting off Giphy in the UK probably wouldn't do what they want. They might want Giphy willing to sell their data to other parties that are competitors to Facebook. If that's the business value of Giphy, merely disabling it in the UK still gives Facebook the worldwide power of Giphy and it would be hard for a NewGiphy to compete with the only advantage being "we have UK data."
It's also up to the UK to determine if such a remedy would satisfy them. Facebook can't disable Giphy and then say "you don't have jurisdiction anymore." That's not how it works. Facebook could pull out of the UK by closing its offices there, but pulling out might involve also not selling ads to UK-based businesses (before Brexit, there's the possibility that Facebook could lean on the common market to continue selling ads).
Basically, disabling Giphy in the UK (or even worldwide) doesn't really solve the issue.
Traditional British media will drum up support for anti-Facebook actions, and the current UK government was elected on a mandate of defending perceived British sovereignty, with economic considerations being less important.[2] The UK government has already engaged in actions that harm its economic interests to safeguard its sovereignty.[3]
1. https://ustr.gov/countries-regions/europe-middle-east/europe...
2. https://ukandeu.ac.uk/new-polling-reveals-shift-from-immigra...
3. https://www.cer.eu/insights/ten-reflections-sovereignty-firs...
Also, Facebook UK is a thing.
It's all about economic power. The UK has to think about potential retaliation by the US.
In the end,Trade wars are often bad for everyone. Usually it's beneficial to find a compromise if possible.
Even laws designed curb market abuse through fines can be considered a cost of doing business rather than a disincentive, making it an economic tool for the perpetrators.
If Facebook defied a British order like that, the U.K. could enforce quite a lot through American courts.