back to article Behind Facebook's $1bn Instagram antitrust dodge

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, …


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  1. Kristian Walsh

    Is that Chris Dixon...

    ... the Ghanaian footballer, or Chris Dixon the champion yachtsman. (These were the top two results when I looked up the name). In other words, he might be a friend of yours, but he's a long way from being so famous that anyone could get away without putting a one-clause bio after his name.

    On the article, a fair point, but only up to a point: photo-sharing is not fundamental to using the Internet in the way a browser or search engine is.

    Put it this way: if you own the one-and-only browser, it doesn't matter how many content discovery systems there are, you can dictate which one is used. If you own the one-and-only content discovery system, it doesn't matter how many photo sharing applications there are, you can dictate which one people find. But if you own the dominant photo sharing application? Well, someone else can start a new one and compete with you. Instagram managed this against Flickr (or beneath them).

    1. toadwarrior

      Re: Is that Chris Dixon...

      By that logic ie should have been left alone. Anyone can make a browser and others existed.

      I agree with his logic that you can't attack one and not the other. I think it has more to do with someone not wanting to crap on facebook's parade just yet. That and perhaps they think as many of us do that instagram is just a fad and would have went by the way side soon anyway.

      1. Kristian Walsh

        Habaeus Corpus...

        You cannot be charged for something you "might" do, only for what you have actually done. Microsoft DID use their OS monopoly to limit the adoption of other web browsers and inhibit competition, and they were brought to court for it, and later lost. Facebook, to date, have done nothing to inhibit photo-sharing services' integration with Facebook. Right now: no act, no crime, no charge, but of course this could change, at which point a complaint would be in order.

        No doubt the regulators will keep looking at Facebook, just as they examine other dominant players in other sectors of industry, but until they abuse their monopoly (e.g., by limiting the access to Facebook APIs that are granted to other photo services), there's no need for any formal proceedings to begin.

        But, then again, maybe the mergers commission *will* look into the takeover... now that they've heard about it. The unorthodox negotiations here didn't give them much notice.

        However, the article still overstates Instagram's place in photo sharing. If you're in the Valley Bubble, it might have seemed to be the big thing, but it was very much an "iPhone-owners-only" club until last month, and other services exist that do the same basic thing (twitpic, flickr, hipstamatic, molome, picasa, and let's not forget... facebook) - buying Instagram does not really give Facebook any more dominance in this area than it already had.

        Personally, I thought Instagram pictures always ended up looking like shit --- literally so in the case of a friend's pic of what he later told me was a Danish pastry.

        1. LDS Silver badge

          Re: Habaeus Corpus...

          You're totally wrong. MS never limited the adoption of other browsers. There was nothing inhibiting development and installation of other browsers on Windows (Apple really limits and inhibits development and installation of application it doesn't like on iOS devices and no one complains - why? Security is only an excuse to fully control its market), there was just a free MS browser available. While the press insisted on IE only - just because that was what most readers would undestand only -, the real "battle" was about the many proprietary protocols, formats and APIs (MS-RPC, SMB, Exchange, Office etc.) that were never documented and made really difficult to write competitive applications. Mozilla and Chrome would have existed anyway because they didn't need any change in MS policies to be written and installed. People started to use them because they were better than the default browser - or just to feel different. Other were the applications that could have been written only reverse-engineering undocumented protocols, with the risk of not working any time the protocols were changed, if the protocols details were not documented.

  2. EddieD

    Has anyone complained about Facebook's dominance?

    I thought that before anti-trust actions could get started, competitors had to make complaints, and I haven't heard any of the other players in social media complaining about Facebook's dominance - yet.

    Myspace appeared dominant a few years back, but has been utterly side-lined by the rise of Facebook, Google+ is stuttering and doing very well/laughably depending on who tells you, BBM is alive and well and much preferred amongst many of my friends, MSN messenger, Yahoo messenger, Apple iChat are all still running, but I have absolutely no idea how well because I don't use them (although I do have a Live! messenger account, I never, ever use it) - all these are the squeezed parties, but I haven't heard a single complaint about Facebook squashing competitors - yet.

    Maybe, as you suggest, it's being left to the market to decide, or maybe, the US government no longer has the money for a protracted action against these global, multi-billion dollar companies.

  3. GotThumbs

    Patiently waiting Anti-Trust suit against Apple

    Speaking of Anti-Trust, I find it unbelievable that Apple HAS NOT been taken through the same wringer that MS was. Apple has the MOST exclusive/closed system to days. MS never prevented users from installing and using other browsers.

    Now just try and load content onto any of you Iproducts without using Itunes. Even just to sample a piece of music...I was prompted to load Itunes. Of course, I immediately left Apples site and tried in on Amazon and Google Play. I was able to sample music for certain artists at both sites, without having to install proprietary programs. You can't say that about Apple.

    It's only a matter of time before Apple's fans wake up to realize the level of control/lack of freedom Apple wields over its flock. Apple knows the general consumer is weak minded and easily bends to Apple controls. How else can you explain Jobs openly criticizing his flock for "Holding it wrong". Jobs clearly saw the general public as mostly stupid and naive. Apple continues to prove him write. Zombies in lines.


    1. Him over there

      Re: Patiently waiting Anti-Trust suit against Apple

      "It's only a matter of time before Apple's fans wake up to realize the level of control/lack of freedom Apple wields over its flock"

      It won't matter at that stage because the flock will be locked in so tight with purchased apps/media that they won't want to move on for fear of losing all that. Or else Apple will release a new shiny-shiny (soon to be available in white!) and the flock will be distracted again...

    2. Anonymous Coward
      Anonymous Coward

      Re: Patiently waiting Anti-Trust suit against Apple

      Should have known that a story that had nothing to do with Apple would bring out the retard brigade. What i don't understand is why you care about people using Apple products, it just seems like a massive case of penis envey.

      1. Ted Treen
        Thumb Up

        Re: Patiently waiting Anti-Trust suit against Apple

        Couldn't agree more. I don't use or visit Facebook - or photo sharing sites. I do however, accept that other people have a right to a different view, and a different course of action.

        I'm not arrogant enough to castigate others for not thinking my way.

        One man's meat etc...

      2. Ted Treen

        Re: Re: Patiently waiting Anti-Trust suit against Apple

        Previous post was in reply to (and agreeing with) AC who posted Friday 20th April 2012 20:39 GMT.

        Header could suggest otherwise...

        1. This post has been deleted by its author

      3. LDS Silver badge
        Thumb Down

        Re: Patiently waiting Anti-Trust suit against Apple

        Because it is funny that someone would still talk about MS releasing IE for free years ago as a "very anticompetitive way to secure that market" while noone complains about Apple's totally closed iOS where Apple can refuse any application it doesn't like to run (and if it allows it to run, you have to pay a 30% fee for the "privilege"). That is far more anticompetitive than MS releasing IE or Media Player for free, and even bundling them with the product because there wasn't - and there is - nothing hindering using other browsers or media players. Although MS didn't document some APIs and protocols, they never blocked the applications that discovered and used them. Apple license terms allows them to do so. And, please, don't blabble about "security", as it was shown malware can sneak through their check sytems, and they resolved the issue just terminating the developer account of the researcher who showed it. That's just the finger to hide behind to keep control of the market.

  4. Spleen

    Is it possible that the reason no-one is launching an anti-trust suit to prevent Facebook gobbling up the crap-photo-sharing market, is because nobody cares about the crap-photo-sharing market? I'd never heard of Instagram before it appeared in the mainstream news media and The Reg because Facebook thought it was worth '$1bn' of unsellable paper. Microsoft's attempt to create a monopoly, on the other hand, affected nearly everybody in the developed world. So does Google's (only now you can delete 'developed'). As far as I can see, this only affects amateur photographers. (Don't quote Niemöller, please, there is nothing in this case that prevents anti-trust authorities from acting later if Facebook tries to dominate a more far-reaching market.)

    Perhaps anti-trust authorities *should* intervene, but it is perfectly understandable why they aren't.

  5. Anonymous Coward
    Anonymous Coward

    >"In mobile we seem to have found plenty of ways to access the web without using a browser"

    ORLY? Like what?

    1. Captain Save-a-ho
      Paris Hilton

      Re: >"In mobile we seem to have found plenty of ways to access the web without using a browser"

      Exactly. Just because it's called an "app" doesn't mean it's not a web browser instance. Most apps are not really apps.

      Even Paris thinks this is the dumbest thing written on El Reg this week.

      1. LDS Silver badge

        Re: >"In mobile we seem to have found plenty of ways to access the web without using a browser"

        LOL! Do people really think to access the Internet you need a browser???? There are tons of applications that communicate using HTTP or any other "internet" protocol without using a dumb browser/HTML/CSS/Javascript interface. The internet is a TCP/IP network, not HTML shuffled around in a magic way...

  6. UBF

    FB = GR

    Facebook's case is precisely like Greece's: Nobody dares to challenge it (i.e. order Greece to exit the Euro), or the "unsellable papers" bubble will bust .

    In addition, the powers to be want to keep their free and undisturbed access to the infinite amount of FB user data/content, just like every country, oil company and their dog want access to Greece's vast gas, oil and mineral resources.

    Now, won't everybody just kindly STFU, these are big boys' games and nuisances like antitrust claims (or upcoming elections) can't and won't scratch the surface of the big picture.

    1. Anonymous Coward
      Anonymous Coward

      Re: FB = GR

      "Greece's vast gas, oil and mineral resources"

      Eh? Are you referring to olive oil?

  7. SirWired 1

    Instagram hardly had any kind of commanding position in online photo sharing. A decent number of users, sure. But hardly a monopoly. Users that don't want to use facebook to share their photos will still have oodles of options.

  8. This post has been deleted by its author

  9. Nate Amsden Silver badge

    i guess I'm old

    I had never heard of the name instagram until it was bought out.

    Aren't there plenty of photo sharing things? I recall hearing about various twitter photo sharing things over the past couple of years, then there is things like flickr and others I'm sure that I've never visited or heard of either. Facebook too I hear is popular for sharing photos - I don't use that site either of course.

    How much of a market share do they have? From what I have seen so far they started out as an iOS only app (did they have a traditional PC-web browser interface that people used a lot or is the bulk of their stuff mobile only?), and only recently introduced android support?

    Doesn't seem to me to be any anti trust things here myself. Don't really see why anyone would care really.

    Funny to see financial folks continuing to question how any of these mobile companies are going to make money. They're pretty much all riding on hype, ala dot com days. Even google admits the revenue they get on mobile is tiny - and revenue is difficult to be had because the screens are so small ? less spots to put ads. Tons of companies in the same boat - lots of eyeballs, and traffic but no money. I saw a discussion recently with some folks talking about twitter - suggesting they should "find a stupid company to acquire them" rather than try to go IPO because they haven't demonstrated the ability to make money (at least in those people's eyes, I haven't kept track - I don't use twitter either).

  10. Anonymous Coward
    Anonymous Coward

    Antitrust photo sharing service?

    "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 .. So why aren't we hearing any antitrust objections?"

    How is Facebook forcing people to use their photo sharing service?

  11. J. Cook Silver badge

    Wait, what?

    Yeah- when I hear the word 'facebook', I don't immediately think of 'sharing photos'. (I generally think of something else, but it's not printable in polite company.)

    Frankly, I think failbook's photo sharing services suck, which is why I don't use it for sharing photos.

    1. Stoneshop Silver badge

      "but it's not printable in polite company"

      So, just go ahead and print it.

    2. Ted Treen

      Re: Wait, what?

      "...which is why I don't use it for sharing photos..."

      You've found a different use for it, then?

  12. Muckminded

    As Relevant

    Please remove the horizontal rule beneath the "Post anonymously" checkbox. It is superfluous.

  13. Anonymous Coward
    Anonymous Coward

    Flawed logic?

    >government intervention is generally unnecessary to guard the free market. By the time the government had ruled on Microsoft, for example, the industry had routed around Microsoft,

    Tell that to the Netscape people. Intervention is too slow to be affective? Don't scrap it, speed it up!

    > In mobile we seem to have found plenty of ways to access the web without using a browser, and arguably this trend could have been hastened by Microsoft blocking up the desktop browser experience.

    Nonsense for 2 reasons:

    - Mobile phone technology drove alternative ways to acccess the web, not whatever was taking place on the desktop

    - Had MS maintained its dominance, all web sites would be serving MS-compliant pages for IE6 instead of W3C-compliant pages

  14. Neil Charles

    For my next $1bn

    I can't see how spending $1bn on Instagram shows Facebook to be a better investment. Yes, it's killed one potential competitor, but it cost a billion dollars to acquire a two year old upstart that has only a handful of employees.

    Is a couple of billion a year for killing little startups costed into Facebook's projections? Or do Facebook really expect investors to believe that Instagram was the last one and it's easy street from here?

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