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FTC launches probe into Facebook's Instagram buyout

updated 04:29 pm EDT, Thu May 10, 2012

Investigation is described as 'routine' for value

The US Federal Trade Commission is launching a competition investigation regarding Facebook's recent $1 billion buyout of Instagram, say two sources for the Financial Times. The effort has allegedly already begun, with the FTC starting to collect information from "at least two" of Facebook's biggest competitors. The probe is described as routine for deals worth more than $68.2 million, but could delay the Instagram acquisition well past when Facebook told investors things would be completed.

In IPO documents published last month, the company said it expected the acquisition to be finished in the second quarter. Experts contacted by the Times suggest, though, that the investigation could delay the deal's close by six months to a year. "They're going to want to take some months to investigate and understand the market and other players," says Stanford Law School professor Mark Lemley. "And there may be more parties with an interest in submitting information."

"[Facebook is] assuming nothing will happen, which is the face you want to put to investors," says Altimeter Group analyst Alan Webber. "If they don't dig too deep, yeah it's possible it could go that fast. I don't think that's likely."

Any probe will also delay Facebook's ability to exploit Instagram, whether in terms of technology or workforce. Should the deal be blocked, Facebook has promised to still pay Instagram $200 million.

By Electronista Staff
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  1. GopherAlex

    Fresh-Faced Recruit

    Joined: Jun 2006


    Your tax $ at work

    Well we can't hassle the financial industry, so let's look into this photo sharing app. Something smells fishy about that sepia filter....

    Hey, somebody has to protect the market for artsy faux-vintage online photos.

  1. chas_m



    No, sorry, can't agree.

    This IS your government at work, looking out for consumers. I wish the rest of the government would apply laws with the same zeal some segments do ...

    I'm not saying that the FB/Instagram deal is necessarily harmful to consumers, but I think the gov't is right to look into the deal, that it ensures that competing apps can still work on FB if they wish to and so forth. They might find that everything's peachy, and I'd still be glad they looked.

    I have no objections whatsoever to the government spending tax money in the name of consumer advocacy. When I get cross is when they don't (like your example of the banksters).

  1. GopherAlex

    Fresh-Faced Recruit

    Joined: Jun 2006


    Fair enough

    No, this is your government at work, imposing more and more layers of idiotic central planning on the tech industry, one of the last holdouts of real U.S. innovation that has yet to be totally squished by the "progressive" bureaucratic regulatory jackboot.

    I wonder if that crop tool complies with the Lacey Act. Better send fully-armed FWS assault team to check.

  1. testudo

    Forum Regular

    Joined: Aug 2001


    Re: Fair enough

    Yes, because what we want is to just allow the industry to go with however they need to. What could go wrong? (Oh, right, we could end up with Microsoft Windows being a dominant OS!).

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