Getty abandons $3.7 billion merger with Shutterstock due to UK requirements.

      A $3.7 billion plan to merge the two largest stock-photo libraries in the world has fallen through. The failure isn’t due to American regulators, who approved the deal, but rather to a condition set by UK regulators that proved insurmountable.

      Getty Images announced this week that it will be ending its merger with Shutterstock, with its board unanimously deciding to walk away after the UK’s competition authority imposed a condition they were unwilling to accept. As first reported by the Wall Street Journal, the agreement is set to be terminated on July 6, unless there is a significant change in circumstances.

      The merger was introduced in January 2025 as a "merger of equals," intending to integrate Getty's picture-and-video wire service with Shutterstock’s collection of around 450 million images. The new entity would have been led by Getty’s CEO, Craig Peters, and the two companies estimated they could achieve between $150 million and $200 million in cost savings within three years.

      While the merger was cleared in the US, it faced hurdles in the UK from the Competition and Markets Authority (CMA). In May, the UK oversight body stated it would only approve the merger if Shutterstock sold off its global editorial division, which includes the Backgrid and Splash photo agencies. The CMA argued that eliminating competition between the two companies would reduce choices for UK media outlets and could increase prices.

      Getty contended that it was “not required” to comply with the CMA’s condition under the merger terms. The board opted to abandon the merger rather than restructure Shutterstock. In contrast, the US Department of Justice had already given the merger a clean bill of health earlier this year without conditions.

      Investors quickly reacted, causing Shutterstock's shares to plummet by about 30 percent in aftermarket trading following the announcement. Getty stated that if the merger fails, it will redeem a portion of senior secured notes and engage an adviser to explore alternative financing options.

      Both Getty and Shutterstock were not merging from a position of strength. They sell licensed images to media and business clients and are both facing urgent competition from AI image generators that can produce images on demand at very low costs. The merger was seen as a strategy to reduce costs and navigate a shrinking market—the latest development in a broader trend of media consolidation, including Bending Spoons’ acquisition of older internet brands.

      However, both companies have recently made their own adaptive agreements with technology, with each entering into licensing deals with OpenAI and Getty’s arrangement to integrate its library into ChatGPT boosting its stock value. The merger was intended to be a significant structural solution, but now that plan is no longer viable.

      The collapse underscores the substantial influence the CMA has over international technology transactions. This is the same authority that enacted new conduct regulations on Google and mandated that publishers be allowed to opt-out of AI search. It also compelled Meta to divest Giphy in 2021. This episode highlights that a US approval is no longer adequate.

      Timing is crucial, as the CMA is currently deliberating on whether to intervene in Paramount's acquisition of Warner Bros Discovery, a significantly larger media transaction. Getty’s withdrawal serves as a cautionary tale regarding the impact of UK regulatory scrutiny. The outcome also leaves two major stock-photo companies to confront the challenges of the AI era independently, rather than as a consolidated entity. Additionally, media companies that once took legal action against OpenAI regarding its training are closely observing how similar dynamics are reshaping the photographic industry, where efforts at consolidation have hit a standstill.