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- 📸 Why Getty just ditched its £2.7 billion Shutterstock merger (after the UK said no)
📸 Why Getty just ditched its £2.7 billion Shutterstock merger (after the UK said no)
Idin Sabahipour
July 08, 2026
Contents
If you take just one thing from this email...
Getty Images and Shutterstock, the world's two biggest stock image companies, have abandoned their $3.7 billion merger because of the UK's Competition and Markets Authority (our competition regulator). This was after the US regulator had already approved the deal.
Even though both companies are listed in New York, the CMA could still review the deal because what matters under UK law is where a company's customers are, not just where the company is based.
So, since they both had a big customer base in the UK, they needed to get approval here too. The CMA only gave them conditional approval, which they didn’t like, so the deal was abandoned completely.
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📸 Why Getty just ditched its £2.7 billion Shutterstock merger (after the UK said no)
What’s going on here?
Getty Images and Shutterstock (the two largest stock image companies in the world) have called off their $3.7 billion (£2.7 billion) merger.
This is because the UK's competition regulator, the Competition and Markets Authority (CMA), said that it would only conditionally approve the merger. The condition was that Shutterstock sells off its editorial business (the part that supplies pictures of real news events, sport and celebrities).
Getty's board decided it would rather abandon the merger than accept that condition.
Why did Getty and Shutterstock want to merge in the first place?
Getty and Shutterstock are facing the same problem – AI is hurting their business.
🤖 AI is taking away part of their business. Getty and Shutterstock make money by licensing images – like, for example, a professional photo of “two people in a meeting” for an advert. But AI tools like ChatGPT and Adobe Firefly can now create a similar image in seconds, so some customers no longer need to pay for a licence.
💪 The merger was meant to help them fight back. Together, Getty and Shutterstock expected to save around $150–200 million each year by removing duplicated costs. Once merged, they won’t need two sets of IT systems, marketing teams, offices and back-office staff. This is what economists call economies of scale – the bigger the operation, the lower the cost of running each part of it.
They could spend the savings on building safer AI image tools trained on images they have permission to access. This would give customers more legal protection than using AI tools that could be trained on images they didn’t have permission to use. They could also license their combined image archives to AI developers like OpenAI.
What is the Competition and Markets Authority?
The Competition and Markets Authority (CMA) is the UK's competition regulator. It's an independent government agency created by s.25 Enterprise and Regulatory Reform Act 2013.
The CMA's job is to enforce competition law in the UK.
🤔 What is competition law?
Competition law (also called antitrust in the US) is the set of rules that keeps markets fair for regular consumers. It stops companies doing things like teaming up to fix prices high or using their size to overcharge customers.
If Uber bought up every rival ride app (like Bolt and Lyft), it could keep hiking fares, knowing you've got no other way to book a ride. Competition law stops exactly that.
The main way the CMA protects markets before they break is merger review, under Part 3 of the Enterprise Act 2002.
The Act lets the CMA investigate any deal that could substantially reduce competition in the UK – and gives it the power to act on what it finds. Here are the sort of things it can do:
🧊 Freeze while it investigates. It can order the companies to stay separate, so they can't continue merging in the meantime.
✂️ Attach conditions to the merger. It can set requirements that the merging companies must fulfil, like forcing the companies to sell off part of the business to a buyer the CMA approves – that’s what happened in this case.
🚫 Block the deal. The CMA can prohibit a deal outright, without any court order.
⏪ Unwind a deal that has completed. Because UK deals don't all have to be pre-approved, the CMA can look back at completed deals and order the buyer to sell the business back – as it made Meta unwind its purchase of Giphy in 2022, 2 years after the deal closed.
In Getty’s case, the CMA attached the condition to the merger that Shutterstock's editorial business be sold off. This condition made the board ultimately abandon the merger.
How could a UK regulator impose conditions on a US merger in the first place?
Getty and Shutterstock are both publicly listed companies in New York. So, at first glance, you might expect the US to be the main regulator here. And the US regulators were involved – in February, the US Department of Justice (DOJ) approved the deal without conditions.
But why did the UK get a say? Because under UK competition law, the share-of-supply test focuses on where customers are affected, not just where companies are based.
🤔 What's the share-of-supply test?
s.23 Enterprise Act 2002 sets out which mergers the CMA can review. There are two main tests for most deals, and a deal only needs to meet one.
→ The turnover test. The business being bought makes over £100 million a year from UK customers. Shutterstock likely didn’t cross this line.
→ The share-of-supply test. The merging companies together supply at least 25% of a particular product or service in the UK, and the merger increases that share. This was how the CMA was able to review the Getty and Shutterstock merger – their combined supply of editorial content to UK customers cleared 25% comfortably.
Notice that both tests measure customers in the UK. Where the companies are based is irrelevant – which is how two New York-listed businesses ended up in front of a British regulator.
The UK isn't unique in this way – US law does the same. The Clayton Act blocks any merger that would substantially harm competition in America, wherever the merging companies come from.
Why did the CMA place a condition on the merger?
The CMA said that the merger could go ahead, but only if Shutterstock's entire editorial business was sold first.
The legal test the CMA applies to every merger it reviews is set out in s.33(1) Enterprise Act 2002. The question is whether the deal may be expected to cause a “substantial lessening of competition” (or SLC) in any UK market – in plain English, whether customers would likely end up with worse prices, less choice or lower quality.
Getty was required to sell Shutterstock's editorial business because the test gave different answers when applied to the two distinct UK markets the companies compete in: stock images and editorial images.
🖼️ Stock images | 📰 Editorial images | |
|---|---|---|
📸 What are they? | General-purpose images that can be used in lots of different places, such as photos of office workers, beaches, laptops or sunsets. | Photos of real people and real events, such as a football match, a celebrity arriving somewhere, or a political protest. |
🔄 Could customers go elsewhere instead? | Usually, yes. Getty and Shutterstock are both big, but a company needing a photo of “a sunset” can choose from thousands of similar images on other websites – or create a new one using AI. | Usually, no. If a newspaper wants a photo from yesterday’s World Cup match, it needs the real photograph from that exact match – an AI lookalike wouldn’t work. Getty is the UK’s biggest supplier and Shutterstock one of its few serious rivals. Together they supply around half of the market. |
🥊 Who else could compete with them? | Adobe and ChatGPT are growing competitors. AI tools are also making it easier to create basic images without buying them from a photo library. | A small number of news and photo agencies compete. It would be very hard for a new company to enter, because it needs photographers, press passes, access to events and a large archive of old photos. |
⚖️ What did the SLC test say? | The merger would have been unlikely to reduce competition, because customers would still have plenty of other ways to get similar images. The deal was cleared for this part of the market. | The merger could reduce competition, because customers would lose one of Getty's main rivals. So broadcasters that rely on editorial images could face higher prices or worse licensing terms. The CMA decided that the deal could only go ahead if the companies accepted a condition to sell Shutterstock's entire editorial business. |
Getty and Shutterstock did try to satisfy the regulator in different ways – a promise not to raise prices for customers for 5 years, and then an offer to sell just two celebrity-photo agencies. But the CMA rejected both as insufficient compromises and insisted on the sell-off.
🤔 Why didn’t editorial images worry the US DOJ?
The DOJ never said why (it doesn't publish its reasons when it clears a deal).
The likely answer is the difference between the two countries' editorial markets. US publishers use competitors like AP and Reuters more than British ones, so the merged company wouldn't have dominated editorial supply in America the way it would in the UK.
Why did Getty decide to call the merger off?
If Getty had to sell Shutterstock’s editorial photo business, it would lose an important part of what made the merger worthwhile (especially since editorial images can’t be generated by AI).
But ending the deal was still expensive. Getty must pay Shutterstock a $40 million break fee – a payment agreed in advance if regulators stopped the deal. Getty pays because buyers usually carry the risk of regulators blocking a deal – the fee compensates the seller when that happens.
Getty also ran up more than $50 million in legal, accounting and other deal costs. It also borrowed $628 million at 10.5% interest, essentially to pay for a merger that will now not happen. Getty won’t keep the loan, though – its terms force early repayment if the merger collapses, so the real cost is the interest that stacked up in the meantime.
Which law firms were involved?
Skadden advised Getty Images on the merger. Shutterstock was advised by White & Case.
How can you use this in your applications?
Here are some ways you can use the insights from this story in your law firm applications.
Insight | How to use it in your applications |
|---|---|
Regulators care about where customers are, not just where companies are based | Getty and Shutterstock are both based in the US, and the US regulator allowed the deal. But the UK competition regulator, the CMA, could still investigate it because lots of affected customers were in the UK. Its condition eventually blocked the merger. If you’re given an M&A case study, and you’re evaluating whether two companies should merge, first, think about regulatory approval. And second, don’t only look at where the two companies are headquartered. Also ask: where are their customers? For example, a US software company buying a German rival may still need UK approval if they both sell lots of payroll software to UK businesses. Each country’s regulator can be a separate obstacle, and one regulator can block the whole deal. |
A failed merger can be extremely expensive | Getty walked away owing a $40 million break fee, having run up more than $50 million in legal and accounting costs, and having borrowed $628 million at 10.5% interest – all for a merger that will never happen. In other words, failing to get approval from a regulator could lead to huge costs and losing the deal altogether. When applying to firms with strong UK competition or corporate practices like Clifford Chance, White & Case or Linklaters, use this to explain why you’re interested in competition law. Companies need legal advice early on in the process about the potential competition hurdles. This shapes how a deal is structured (like who pays a break fee if regulators block the deal), what concessions to offer the regulator (like promising to cap prices), and whether a merger is worth attempting at all. |
IN OTHER NEWS 🗞
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⚖️ The Supreme Court has ruled that LLP members (like law firm partners) can be taxed as employees. The decision came in hedge fund BlueCrest's £200 million battle with HMRC, which argued most of its traders were employees dressed up as partners to pay less tax. Judges unanimously sided with HMRC on both disputed tests, ending a four-year fight. Most law firms are LLPs, so these tests could impact how they’re taxed.
🏬 TG Jones (the new, renamed WHSmith) can now close up to 150 of its 480 high street stores. The High Court approved a restructuring plan from its owner Modella Capital, which lets the struggling chain cut jobs and force landlords to accept lower rents to avoid administration. Modella bought the business for an initial £10 million last year, then admitted it was "almost completely broken". We covered the WHSmith sale when it happened.
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