News by Dan Seifert on Thursday May 10, 2012.
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Facebook rocked the tech world when it announced plans to buy photo-sharing mobile app Instagram to the tune of $1 billion last month, but it also looks like the activity between the companies has caught the eye of the U.S. Federal Trade Commission. According to The Financial Times, the FTC is launching an investigation into the proposed purchase, and the closure of the deal could be delayed because of it.
The investigation could take anywhere from six to twelve months, which would push the closing of the deal well past the second quarter date that Facebook had initially expected. The FTC has already begun collecting documents from Facebook and Instagram's competitors to determine if there would be any anti-trust concerns with the deal.
Experts expect the deal to be ultimately approved, but the FTC will keep a close eye on everything before it gives the go-ahead. The unprecedented purchase price and high profile of both companies will make sure the merger is gone over with a fine tooth comb by the feds.
Until the FTC approves the merger, Facebook cannot use Instagram's technology or mobile development staff for its own projects, so it can't really benefit from the purchase yet. Facebook has committed to paying Instagram a $200 million break-up fee if it is unable to get the acquisition approved by regulators.source: Financial Times
Dan is MobileBurn.com's Editor-in-Chief. Based in Poughkeepsie in New York, Dan can be found on Twitter as @DCSeifert.