One big surprise to me in its latest securities filing: Facebook notes that the Instagram acquisition is subject to regulatory anti-trust approval:
“This acquisition is subject to customary closing conditions, including the expiration or early termination of all applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (HSR), and is currently expected to close in the second quarter of 2012.”
If I’m correct, this is the first time Facebook has done anything that would require any kind of anti-trust review. It seems far-fetched to think either the Department of Justice or the Federal Trade Commission would make an anti-trust case here.
Typically, whichever agency is reviewing the deal has six weeks to either approve the acquisition or make a request for more information. I still think even the latter is unlikely, and so does Facebook, which says the deal will probably close this quarter.
But it would be interesting, if these agencies wanted to fire a bit of a warning shot. The could do that by making that request to better acquaint themselves with Facebook’s business, and to put the company on notice that it’s being watched closely as it grows and becomes more dominant.
That raises the question: Where would the feds consider Facebook to have too much power (and possibly abusing it)? One area might be photo sharing, though it seems like there are an infinite number of places to do that on the Web. The other would be social networking, though that seems pretty hard to definite as a market. Would that circle include every site with some social capabilities?
In any case, Facebook must be pretty confident it will close the deal, since it agreed to pay Instagram $200 million in cash if it doesn’t.
Update: Worth noting that Facebook itself hasn’t shown too much concern over anti-trust issues. In its latest lobbying disclosure, that was not among the issues it said it was lobbying on.