Facebook’s billion dollar baby

Published On 16/08/2012 | By Jenny Jiang | Mergers

The reasonably new “market” that is social networking has seen its first headline-making acquisition cleared by the UK Office of Fair Trading (OFT).   The OFT has decided not to refer the acquisition by Facebook of Instagram to the Competition Commission, having reportedly examined “potential competition in social networking services”, “the supply of photo apps” and “whether the merger might result in the merging parties limiting people from other using other apps or other sites”.

The evolving world of social media, or perhaps we should say the ever expanding Facebook empire, is raising all kinds of complex legal questions and testing the frameworks that regulators use.  The parties involved operate across markets for advertising space, photo sharing and of course social networking with a customer base that is seemingly well positioned to switch providers by simply browsing through the app store for an alternative. Or are they?

Let’s watch this space for what Facebook decides to do with its shiny new acquisition. Will we soon be constrained to sharing photos of what we had for brunch on one of the two platforms? Are app designers all over the world putting their iPads down in despair and giving up on designing new photo sharing apps?

We’re waiting to read the OFT’s written decision as well as the outcome of the US Federal Trade Commission’s review. More to come.

Photo credit: derriel street photography / Foter / CC BY

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