Facebook's acquisition of Instagram came about as quite a surprise, mostly due to the sum of money Zuckerberg's social network threw at the photo sharing service: an eye-watering billion dollars, which was probably enough to sway most people.
Things could be brought to an abrupt standstill, though, as Gigaom reports. A former U.S. Department of Justice lawyer and antitrust expert says that the purchase could take anywhere from four months to a year to clear regulation. Until that time, the deal has been halted. The Financial Times reported that the deal would be halted by a probe from the Federal Trade Commission (FTC), and this is exactly what is going to happen. The agency conducts a 30-day review of any deal worth more than $66,000,000. If concerned they begin a second, more detailed review.
The problem arises from Facebook's existing position as a leader in social photograhy. If they were to own Instagram they would be in control of two major social networks that place a large emphasis on photographs. For this reason the fear is that they could use these two platforms to establish a major lead over other competing sites, in which case they could never rebound.
Washington-based antitrust expert Andre Barlow explains that the FTC and Department of Justice are very interested in the internet, and its significance in their business. Not only this, but he admits that the agencies will use the review process to learn more about industries and rapidly advancing areas which they may not currently understand. In an absolute worst case scenario situation, the FTC could simply block the deal and prevent the purchase. Considering that the FTC has cleared every Google deal so far though, the chances of a complete block are almost nil.
One theory currently appearing online is that Google and Twitter both encouraged the FTC to take a look into Facebook's business dealings. While this might initially sound devious or manipulative, the opportunity could allow both sites to push their products. In Twitter's case this would be their official image host, while for Google it would likely be the Google+ social network, which was recently redesigned. When asked for a comment on the story, Facebook declined to comment. This suits with the site's current quiet period, as it prepares itself for an upcoming IPO valuation.
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