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Facebook’s (NASDAQ:FB) $1 billion acquisition of mobile photo-sharing app maker Instagram has been cleared by Britain’s Office of Fair Trading, even as the social network must wait on a decision from U.S. regulators.
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The British watchdog decided not to refer the deal to the U.K. Competition Commission, where it would have been subjected to a full investigation, according to the OFT. The OFT’s investigation focused on whether the merger was likely to restrict people from using other apps to upload to the social network or from uploading from Instagram to sites other than Facebook.
“We examined this in light of them both offering social networking services, looking at potential competition in social networking services, and in the supply of photo apps and whether the merger might result in the merging parties limiting people from others using other apps or other sites,” an OFT spokesman told TechCrunch. “In brief we concluded that there are several relatively strong competitors to Instagram which appear to pose a stronger constraint to Instagram than Facebook does.”
The OFT usually reviews all cases where the companies in question either make more than $110 million annually or control more than 25 percent of the market. The U.S. Federal Trade Commission, which is also reviewing the merger, investigates any deal with a value greater than $68.2 million.
A month before it went public, Facebook announced its proposed takeover of the popular app Instagram in an effort to make its mobile offerings more meaningful to its 950 million users. Instagram has picked up more than 50 million users in the two years it has been around and is increasingly becoming a key part of companies’ social strategy.
Facebook went public on May 18 in a highly watched IPO, but has lost much of its market value since as its share price keeps dropping on worries about future revenue opportunities and a smooth transition to the mobile platform.
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