Facebook/Instagram Deal Given Go-Ahead
Instagram is a free image-sharing application, defined by many as a social network unto itself. Often used to promote artistic work, it allows for limited digital enhancement and filter application, and proved popular among amateur photographers for its minimalistic, user-friendly design. It gained some substantial fame when singer-songwriter Ellie Goulding gave it an unofficial endorsement by running a fan campaign (requesting fans put together a video using their own images taken with the software).
On April 12th 2012, Facebook acquired Instagram for over $1billion in both funds and shares; carrying out one of the largest business deals ever seen in the world of social networking. Some initial concerns were voiced, insinuating that Facebook would negatively impact the service, but founder Mark Zuckerberg has assured fans of Instagram that he intends to integrate with Facebook, as opposed to totally amalgamating the two. Thus-far, the two have been linked, with users able to use Instagram via their smartphones; instantly applying filters to photograph they take, before uploading them to Facebook (wherein the pictures bear a small ‘instagram’ logo).
However, concerns have been raised as-to the ethics of the deal. Some groups felt that Facebook would, through Instagram, gain an unfairly large grip on the Social Networking market. Others felt that Facebook would be monopolising the lucrative ‘app-based’ social networking market on smartphones. While not compellingly large in number, these people did cause enough of a stir to prompt an investigation by the UK-based ‘Office of Fair Trading’ (OFT). A monopoly, defined as ‘excessive control or ownership’ of a market, is frowned upon. Though not always illegal, monopolies are considered poor and un-competitive practice, and government agencies have the power to step in and break up ‘conglomerates’ accused of such methods. However, the OFT investigation ended without such an event taking place. The organisation released a statement saying “The OFT has decided, on the information currently available to it, not to refer this merger to the Competition Commission under the provisions of the Enterprise Act 2002.”
In short, it found nothing overtly illegal or uncompetitive about the move, which some have compared to Flickr’s acquisition by Yahoo, and therefore did not think it worth launching a full investigation.
The future of the system is unclear. As it stands, Instagram-via-Facebook is becoming a popular service, losing none of its usability and quirkiness. If anything, the controversial move and subsequent investigation (the first of its kind, against a Social Networking company) has helped to generate more interest in Instagram. For now, at least, Zuckerberg’s promise not to bleed-dry the service appears well-founded.