Expect a 6 month freeze on Facebook’s Instagram acquisition
A former U.S. Department of Justice lawyer and antitrust expert says Facebook’s purchase of photo-sharing site Instagram will take between four months and one year to clear regulatory hurdles. In the meantime, the deal is effectively on hold.
One month after Facebook announced it bought Instagram for an eye-popping $1 billion, the Financial Times reported that the deal would be delayed due to a probe by the Federal Trade Commission. Here’s what you need to know:
Why is the FTC messing with the deal?
The federal agency conducts a routine 30-day review of any deal over $66 million as a matter of course. If it has concerns, it sends a “second request” and begins a more detailed review. This is what has happened here.
Right, but Instagram has like 10 people and no revenue. What the’s problem?
If Facebook can have Instagram, it will be a leading player in photo sharing both online and on mobile. (See Om’s explanation here). The FTC is concerned Facebook could become a dominant advertiser on these platforms — and hurt competition.
According to Washington antitrust expert Andre Barlow, “the FTC and DOJ are really concerned about tech markets and the internet.” He adds that the agencies also use the… read the full story at Paidcontent.co.uk
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Posted by Jeff Roberts
on May 16 2012. Filed under Digital, featured.
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