Facebook-Instagram Deal: Feds are Done Here

The Federal Trade Commission announced Wednesday that it had completed its investigation of Facebook’s purchase of photo-sharing app Instagram — all but clearing the way for the deal to close.

“It now appears that no further action is warranted by the Commission at this time,” the FTC’s acting secretary April Tabor wrote both companies on Wednesday. “Accordingly, the investigation has been closed … [but] the Commission reserves the right to take such further action as the public interest may require.”

In FTC-speak, however, that means Facebook has the federal approval it sought for the purchase. The Commission’s vote to close the investigation was unanimous, 5-0.

The deal has one more regulatory hurdle to jump at the state level: a “fairness hearing”, which will take place next week at the California Department of Corporations in San Francisco.

Facebook offered what was then roughly a billion dollars for the fast-growing photo app back in April, just 17 months after Instagram was founded. Since the deal was largely rooted in Facebook stock, though, and that stock has been declining rapidly, the cost of the deal is now closer to $700 million.

On his first earnings call last month, Facebook founder Mark Zuckerberg wouldn’t talk about the company’s plans for Instagram, largely because the deal hadn’t closed yet. We’re looking forward to what he has to say about it on the next call.

At the very least, we’re sure he’s breathing a sigh of relief. If the deal failed to close for any reason, according to the contract, Facebook would owe Instagram a cool $200 million. 

Source : mashable.com