Getty, Shutterstock deal faces in-depth UK antitrust probe

Getty Images Holdings Inc.’s plan to acquire rival stock-photo provider Shutterstock Inc. will face an in-depth probe from the UK’s deal watchdog amid concerns the tie-up could hamper competition.

The Competition and Markets Authority said Monday that the deal to create a combined firm worth about $3.7 billion could lead to higher prices, worse commercial terms and lower quality of editorial and stock images for customers.

Getty Images’ shares fell 7.7% in New York after the UK regulator’s announcement while Shutterstock shares dropped 8.1% by 2:45 p.m. in London.

The CMA said remedies offered by the content-licensing firms weren’t enough to prevent a so-called Phase 2 investigation. It will take a final decision on the deal by April 19.

Getty Images plans to pay $331 million in cash and 319.4 million of its own shares, with its shareholders owning 54.7% of the combined company. The deal will bring together two of the biggest providers of licensed visual content as artificial intelligence upends the content-creation market and smartphone cameras dilute the value of stock photos. The transaction is also under scrutiny by the US Department of Justice.

Getty Images offered comprehensive remedies to avoid an in depth review and is disappointed at the CMA’s decision, the company said in a statement. Getty “remains committed to the proposed merger and will continue to engage with the CMA and work with Shutterstock to expeditiously secure the necessary clearances.”

A spokesperson for Shutterstock didn’t respond to emails seeking comment.

The CMA raised concerns last month that the deal could lead to “substantial lessening of competition” in the supply of editorial content in the UK and stock content globally. Their competitors would face significant investment costs to achieve the scale to become a viable alternative, the watchdog said at the time.