Reports surfaced earlier this month that the U.S. Federal Trade Commission (FTC) had begun a probe into Facebook’s proposed $1 billion acquisition of Instagram. No specific reasons were given for the FTC’s probe, but the acquisition was reportedly stalled due to antitrust concerns. It will likely take regulators up to a year to determine if the deal violates U.S. antitrust law.
Facebook will pay Instagram $200 million if the deal falls through. If the FTC approves the acquisition, Instagram’s two co-founders will net $500 million combined.
Reuters reports:
Facebook has received notice that U.S. antitrust regulators will give its proposed purchase of the popular photo-sharing app maker Instagram a lengthy investigation, an industry source told Reuters on Tuesday.
Facebook has received a “second request” from the Federal Trade Commission, essentially a request for relatively large amounts of data that the regulators will sift through to ensure that the deal complies with antitrust law.
Facebook recently went public, and the company’s stock has been sliding since. The social network is currently valued at around $79 billion.
Source: Reuters
Alex Heath is a journalist who works for Tech Insider. He’s the former co-host of The CultCast. He has been quoted by the likes of the BBC, KRON 4 News, and books like “ICONIC: A Photographic Tribute to Apple Innovation.” He lives in Lexington, Kentucky. If you want to pitch a story, share a tip, or just get in touch, additional contact information is available on his personal site. Follow him on Twitter.
