Shutterstock-Getty Merger Faces In-Depth UK Antitrust Probe
Competition and Markets Authority escalates review of the major stock imagery deal to a Phase 2 investigation, citing significant competition concerns and casting doubt on the merger's timeline.
The proposed merger between stock content giants Shutterstock (NYSE: SSTK) and Getty Images (NYSE: GETY) has hit a significant regulatory roadblock in the United Kingdom, casting fresh uncertainty over the future of the multi-billion dollar deal.
On Monday, the UK’s Competition and Markets Authority (CMA) announced it was escalating its review to an in-depth Phase 2 investigation. The decision signals serious antitrust concerns that the combination of two of the world's largest stock and editorial imagery providers could harm competition. Following the news, shares of Getty Images fell sharply, closing down 6.5% in Tuesday trading, while Shutterstock’s stock saw milder fluctuations.
The CMA’s move follows a Phase 1 review which concluded the merger could lead to a “substantial lessening of competition” in the UK market. According to the regulator's official statement, the deal raises concerns that customers, including news organizations, advertisers, and creative professionals, could face higher prices or lower quality service due to reduced choice.
The referral to a deeper probe indicates that remedies offered by Getty Images to alleviate these concerns were deemed insufficient. In a press release, Getty Images expressed its disappointment with the decision but affirmed its commitment to the merger. The company stated it will “continue to work collaboratively with the CMA” to secure the necessary clearances.
The transaction, which would combine two dominant forces in the digital content industry, is also facing scrutiny from regulators in the United States. The U.S. Department of Justice has already issued a “Second Request” for information, signaling its own comprehensive antitrust review is underway. The dual investigations from major global regulators present a formidable challenge to the deal's completion.
The market’s reaction highlights the complexities facing the two companies. While the regulatory news pressured Getty's stock, the company recently experienced a significant surge after announcing a multi-year AI content licensing partnership with Perplexity AI. The 19% jump on November 1st underscores strong investor interest in Getty's strategy to monetize its vast library for training artificial intelligence models, a narrative temporarily overshadowed by the merger's regulatory hurdles.
Analysts had previously viewed the deal with caution. Last week, analysts at Wedbush Securities had pegged the odds of a smooth UK regulatory approval at just 50/50, a forecast that now appears well-founded. A Phase 2 investigation is a more formal and lengthy process, typically lasting 24 weeks or more, during which an independent panel conducts a detailed analysis.
For investors, the prolonged uncertainty becomes a key risk. The CMA now has several options: it can clear the merger, approve it with specific conditions (such as the divestiture of certain assets), or block it entirely. Until a final decision is reached, both Shutterstock and Getty Images shares are likely to remain sensitive to any news regarding the regulatory process in both the UK and the US.
With a market capitalization of approximately $888 million for Shutterstock and around $780 million for Getty Images, the proposed combination aims to create a powerhouse with unparalleled scale in the stock media landscape. However, that very scale is what has drawn the intense interest of competition watchdogs, who are now poised to decide the fate of one of the industry's most significant proposed tie-ups.