Facebook could face year-long antitrust probe into Instagram deal

May 14, 2012 | Facebook marketing

Facebook’s Instagram deal could be delayed by as long as a year after a federal agency launched an investigation into the $1bn purchase. According to a report by Reuters, the US Federal Trade Commission has reached out to Google and Twitter to look into the acquisition. It was not immediately clear what specific information the […]

Facebook’s Instagram deal could be delayed by as long as a year after a federal agency launched an investigation into the $1bn purchase. According to a report by Reuters, the US Federal Trade Commission has reached out to Google and Twitter to look into the acquisition. It was not immediately clear what specific information the FTC was looking for, Reuters quotes a source as saying.


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The antitrust probe could take between six months and a year to complete, disrupting plans to have the deal closed within the next few months.
According to another report from the Financial Times, the competition procedure, which is routine for any deal worth over $68.2 million in the US.
Until the deal is finalised Facebook will be unable to work on any part of Instagram.
The acquisition of Instagram, which is a hugely popular app among smartphone users, is thought to be linked to Facebook’s desire to embrace mobile users, with the company warning investors that the soaring popularity of mobile apps poses a threat to its long-term prospects.
Facebook boss Mark Zuckerberg also made it clear that the company plans to build on Instagram’s strengths rather than simply integrating it with Facebook.
‘That’s why we’re committed to building and growing Instagram independently. Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people,’ he stated.
The FTC’s review of the deal comes as Facebook is preparing to raise as much as $12 billion in a record-breaking initial public offering that could occur as soon as next week.
Some investors have cited Facebook’s limited advertising revenue from the mobile versions of its service as a potential concern with regards to the company’s long-term growth potential.
Read the Reuters report here

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