The Federal Trade Commission (FTC) has launched a competition probe into Facebook’s $1 billion acquisition of photo-sharing service Instagram, which could end up delaying the deal by at least a year.
According to the Financial Times, the FTC has already begun collating information from two of Facebook’s biggest rivals – and whilst the paper did not name the competitors, it’s rumoured to be that of Google and Twitter.
Most mergers with a value of $66 million or more must be reported to the FTC, but Facebook’s investigation regarding competition matters could compromise the firm’s plans to close the deal by the end of the second quarter.
Antitrust attorney with Blecher & Collins, Maxwell Blecher, said an antitrust probe could take a month at least.
“If they go into it further and they issue additional requests for information, that could probably take up to six months,” he explained.
Although the investigation is currently underway, analysts believe it could take up to 12 months to clear. However, this shouldn’t necessarily delay Facebook’s IPO.
“They’re going to want to take some months to investigate and understand the market and other players,” said Mark Lemley, a professor at Stanford Law School. “And there may be more parties with an interest in submitting information.”Leave a comment on this article