FTC: It’s Up To Facebook To Decide Whether An Instagram Investigation Will Impact The IPO
May 15th, 2012As Facebook inches ever closer to its IPO — which some are projecting may be the biggest-ever in U.S. corporate history — there have been some slightly conflicting stories zipping across the ether today involving another Facebook story line: its $1 billion acquisition of photo-sharing service Instagram and a rumored Federal Trade Commission investigation into the deal: The FT is reporting that an investigation could delay the acquisition here. Betabeat is reporting that this could actually delay Facebook’s IPO.
Could it be both? Either? Neither? We reached out to the FTC to get some info straight from the horse’s mouth.
For starters, it should be pointed out that the FTC can’t say one way or the other whether it is investigating the Facebook/Instagram deal. “The commission does not comment on investigations,” Mitch Katz, a public affairs spokesperson, told us. “You would need to check directly with the company.”
However, he did also note that as a matter of course, the FTC investigates all deals with a value greater than $68.2 million. That puts this $1 billion deal firmly into the investigating pile, then.
What next? Once the FTC — or, for that matter, the Department of Justice, which also routinely investigates M&A deals — does initiate an investigation, it can last for up to 30 days and the merger cannot go ahead until that investigation is terminated. (By the way, although the FTC can’t say when it is investigating someone, it can publicly disclose when it has terminated that investigation. Go figure.)
If, when the preliminary investigation period of 30 days is up and the FTC has not yet come to a decision, it can ask for a second request. This doesn’t necessarily mean something suspicious is going on, Katz told me.
“A lot of people think, if we issue a second request, that means we have problems with a deal. But that’s not true,” he said. “It may be that we just need more in


