UK's Office of Fair Trading to investigate $1bn Instagram deal

The UK's Office of Fair Trading (OFT) is to investigate Facebook's April announcement of its planned $1 billion purchase of Instagram due to concerns that the social networking giant could unfairly exert control over the competition by restricting the uploading of pictures via its smartphone apps, the Guardian has reported.

Instagram started back in October 2010 as an iPhone app enabling users to take pictures and then upload them to various social networking sites, or even email them. The service proved so popular among iPhone owners that the free app hit 30 million users in less than 18 months.

The OFT has the power to investigate any merger exceeding £70 million ($110m) in annual revenue, or any deal that would result in a combined market share of 25% or more. Because Facebook has offices in the UK, it does potentially give the British regulatory authority the right to investigate the merger, although the latter was cautious to note that it still needed to clarify jurisdiction.

Whilst its possible no further action will be taken, the OFT is concerned that Facebook could potentially restrict what sites Instagram app users can upload pictures to in a bid to limit competition, or restrict access to Instagram from other apps. It has asked interested parties to comment on the deal by July 5.

The OFT has until August 23 to conclude whether it has jurisdiction over the deal. Photo app developers and competing social networks are invited to lodge their comments and complaints by July 5. If a case appears strong enough to pursue, the OFT can seek undertakings from both parties to clarify whether the deal would have a negative impact on competitors, or refer the entire bid to the UK Competition Commission.

In the US, the Federal Trade Commission is also routinely investigating the deal, a process required for any deal exceeding $68.2 million, and will require close competitors to comment on the acquisition.

"We'll continue to work closely with the OFT and look forward to answering any questions that arise," a Facebook spokesperson said in a statement.

Source : http://techspot.com

AT&T talks to sell assets go cold, merger with T-Mobile looking less likely

Talks to sell some T-Mobile USA assets as a precondition to closing a merger deal with AT&T have "gone cold,"according to a report by The Wall Street Journal. Citing people familiar with the matter, the newspaper says the companies no longer believe such a deal would help persuade regulators into letting the merger go forward. They are not ruling out an acquisition yet, but AT&T is apparently already looking at other options, such as a partial takeover or a joint venture with the Deutsche Telekom-owned carrier.

Companies involved in the talks reportedly included small wireless operator Leap and Dish Network, which has shown serious interest in diversifying their business beyond pay television in the last year.

AT&T is currently the second largest wireless operator in the U.S. Should its planned $39 billion cash-and-stock acquisition of T-Mobile USA  go through it would add around 34 million customers and effectively vault them into the leading position in the U.S. wireless market, overtaking Verizon Wireless.

But the companies are having a hard time convincing the FCC and the Department of Justice that a merger will not hinder competition for wireless services across the country. AT&T withdrew its merger application with the FCC in late November just days after the latter hinted it would not back the planned acquisition. They subsequently recorded a $4 billion charge against earnings this quarter to cover the $3 billion in cash and $1 billion in spectrum licenses it agreed to turn over to Deutsche Telekom if the deal faltered.