Antitrust law was not written for modern acquisitions like Instagram. A traditional monopoly was a company with such a hold on its industry that it harmed others by fixing prices or controlling a supply chain. Facebook and Instagram presented no obvious consumer harm because their products were free to use, as long as people were willing to give up their data to the network. Facebook’s advertising business was relatively new, especially on mobile phones; Instagram didn’t have a business model at all. Something was a monopoly if it undermined its rivals; Instagram had many rivals. Instagram wasn’t even the first company to make a mobile photo app with filters.
So the Federal Trade Commission started its investigation with a simpler question. Were Facebook and Instagram competing with each other? If they were, it would reduce competition in the marketplace if they were allowed to merge.
First, regulators needed a clear picture of what Instagram thought of Facebook and vice versa,…
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Source : fastcompany.com
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