Facebook’s recent billion-dollar buyout of photo-sharing social network Instagram is now under government review.
It has been reported that the US Federal Trade Commission (FTC) had launched a competition investigation regarding Facebook's $1 billion acquisition of Instagram, with two of Facebook's biggest rivals Google and Twitter being questioned by the FTC for information, according to the Financial Times report.
The probe is said to be just a routine for deals worth more than $68.2 million as such type of mergers or acquisition is required to be reported to the FTC, with preliminary reviews by the agency being a common routine. But the said probe of any competition issues could delay the closing of the deal for several months which is expected to be completed by the end of the second quarter as disclosed in the timeframe outlined in its initial public offering (IPO) prospectus.
In its largest acquisition deal up to date ever, last April 2012, Facebook had acquired Instagram for approximately $1 billion in cash and stock.
Now, Facebook’s $1 billion Instagram acquisition is under investigation which could last up to 6-12 months. A routine antitrust probe is said to likely take at least a month. But, if there is a need for a deeper investigation and additional requests for information, it could probably take up to 6 months to 12 months, according to Maxwell Blecher, an antitrust attorney with Blecher & Collins.
As part of the investigation, Google and Twitter has been contacted by the FTC, though it’s unclear what information has been requested by the FTC from the two companies.
Purchased to facilitate its mobile monetization goals, making its service more appealing on smartphones, this delay’s major threat, according to the FT, is not the deal’s prospect of being blocked by U.S. competition regulators, which is seen as unlikely, but that it could hurt Facebook's efforts to strengthen its mobile strategy.
During its regulatory filings Facebook has revealed that its revenue will suffer as users increasingly access its service from mobile devices rather than PCs.
Keep on visiting our SEO Tips and Updates Blog. Feel free to read our SEO articles and news. Or if you're searching for a reliable SEO Australia that provides Cost-Effective Search Engine Optimisation Services, then try our FREE SEO Audit