UK approves Facebook's acquisition of Instagram

The UK Office of Fair Trading (OFT) has reviewed the anticipated acquisition of photo sharing service Instagram by Facebook and decided to approve the merger, an OFT spokesman said on Wednesday.

The merger will not be referred to the Competition Commission. OFT investigates markets and can refer its studies to the Commission for enforcement action.

The OFT reviewed if the deal would result in a substantial lessening of competition in the UK, and that is not the case, said spokesman Frank Shepherd.

The Office of Fair Trading looked into the merger because it was concerned that Facebook could limit the use of other photo services on its social network after the acquisition, or limit the use of Instagram on other social networks, Shepherd said. "The evidence did not suggest that the parties have the intention to do so," he added.

A full document of the decision will probably be available in a couple of weeks, he said. The document has been sent to Facebook and Instagram to give them the chance to redact any commercial confidential information, he added.

Facebook announced in April that it was planning to buy Instagram for US$1 billion in cash and stock. The company's CEO Mark Zuckerberg called it an important milestone at the time because it was the first time that Facebook acquired a service with so many users. Instagram announced two weeks ago that its user base had grown to over 80 million registered users, that shared nearly 40 billion photos.

The US Federal Trade Commission started an evaluation of the acquisition last May. The review of the merger could take six months.