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[El Reg] Behind Facebook's $1bn Instagram antitrust dodge

post #1 of 6
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Quote:
Originally Posted by The Register .co .uk 
Open ... and Shut Apparently it's wrong to dominate the market for free search and free web browsers, but it's perfectly fine to dominate the market for photo sharing. That seems to be the lesson from the curious silence from antitrust authorities on Facebook's proposed $1bn acquisition of Instagram.

Pundits applaud Facebook's strategic coup, taking out a rising competitor for a small slice of Facebook's market value, but this is the very kind of behavior antitrust bodies normally frown upon.

So why aren't we hearing any antitrust objections?

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To read the full article, click here
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post #2 of 6
Wow, what a dumb article, I don't think that author knows what he's reporting on.

The key part of anti-trust litigation is anti-competitive practices, not market share. Having a dominating market share is almost always a prerequisite to a review, but that doesn't mean that all companies that dominate their markets get slapped by the FTC.

An example of anti-competitive practices in software would be something like Microsoft's MS Word .doc. If instagram and facebook used a closed and proprietary image format and worked with phone manufacturers to default photos to this format, then maybe that would warrant a review, but as it stands it's very easy for new competitors to enter the mobile photo sharing space. See the difference?
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post #3 of 6
Quote:
Originally Posted by mechtech View Post

Wow, what a dumb article, I don't think that author knows what he's reporting on.

The key part of anti-trust litigation is anti-competitive practices, not market share. Having a dominating market share is almost always a prerequisite to a review, but that doesn't mean that all companies that dominate their markets get slapped by the FTC.

An example of anti-competitive practices in software would be something like Microsoft's MS Word .doc. If instagram and facebook used a closed and proprietary image format and worked with phone manufacturers to default photos to this format, then maybe that would warrant a review, but as it stands it's very easy for new competitors to enter the mobile photo sharing space. See the difference?

Agreed.
    
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post #4 of 6
"a shrewd move to knock out a competitor before it became a mortal threat."

Lol, sure. Instagram was a "mortal threat" to Facebook. rolleyes.gif
post #5 of 6
In the UK we have the competition commission that in theory are not supposed to allow acquisitions that diminish competition beyond a certain point. I suspect the author of this article (on a UK site) is assuming that the American equivalent provides a similar role.
post #6 of 6
The author of the article sounds like one of these everyday "hipsters" who loves his iPhone and his photo app and who seems to be very annoyed his favourite app was purchased by Facebook.

To clarify to any possible Apple users who feel stereotyped, I use apple products and also use Instagram from time to time.
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