Why The FTC Is Investigating The Facebook/Instagram Deal

Its been reported that the U.S. Federal Trade Commission has
been investigating Facebooks pending $1 billion acquisition of
the popular photo sharing app Instagram. This has left some
people scratching their heads, wondering why the FTC in the
middle of its expansive and thorough investigation
of Google and with all else the FTC has on its plate is looking
at the acquisition of a single app and a company with less than a
dozen employees. Although the FTC hasnt commented on its
investigation, some explanation can be found in how tech
markets function generally and what Instagrams future role in
those markets may be.
As an initial matter, its important to note that the antitrust
agencies inquiries into mergers and acquisitions turn on
the potential of the deals to harm competition. The agencies
attempt to assess what competition would look like in the future,
first without the deal and then comparing that to
whatmight happen with the deal.
In fact, the agencies are required by law to try to peer into the
future. The governing antitrust law, Section 7 of the Clayton
Act, prohibits acquisitions where . . . the effect of such
acquisition may be substantially to lessen competition, or to
tend to create a monopoly. (Emphasis added.) Congress used
the words may be substantially to lessen competition
(emphasis supplied), to indicate that its concern was with
probabilities, not certainties, because the inquiry is prospective
by definition. See Brown Shoe Co. v. United States, 370 U.S.
294, 323 (1962).
So the relevant questions for the Facebook/Instagram deal are:
What might Instagram be able to accomplish on its own in the
marketplace?
Is there a risk that Facebooks acquisition would undermine
that, and what might that mean for competition?
Notwithstanding its handful of employees and possible lack of
capital relative to the major tech firms, Instagram has shown
remarkable success in acquiring the single most important asset
in technology markets: users. And it has done so at a
phenomenal pace: 30 million-plus users in two years. Whether
youre talking about PC or mobile operating systems, Web
browsers, search engines, or tablets, the single greatest
competitive advantage is the number of users. This is because of
something the economists and antitrust lawyers call network
effects, i.e., a piece of technology becomes more valuable as
more people use it. Thats because the more people who use a
piece of software or hardware technology, the more developers
create complementary functionality for that technology, which
makes that technology more valuable and leads to more users,
and so on and so on. Its a positive feedback loop. The iPad is a
great piece of technology for many reasons, but the single
biggest factor in the iPads success has been the quantity and
quality of the apps, which exist because so many people use
them that it is valuable for app developers to write to the iOS
platform.
The fact that millions of people use and apparently love
Instagram for sharing their photos means that Instagram has the
potential although it is far from certain to one day compete
with Facebook in social networking. Adding functionality like a
wall to Instagrams photo sharing is technologically relatively
simple. Instagram has already done the hard part: attracting a
large user base. Think about Google+: one day Google had
minimal social networking capabilities; the next it was a full-on
competitor to Facebook. What principally enabled Google to flip
the switch was its large user base. Although the software
engineers did a great job adding the functionality, it wouldnt
have mattered without the hundreds of millions of Google and
Gmail users.
One would therefore expect the FTCs investigation to turn on
Instagrams future plans, as evidenced by internal documents
and interviews with its head business-people, and also on
internal Facebook documents and whether there is evidence that
Facebook views Instagram as a credible threat to Facebooks
position in social networking. If Instagram had no plans to go up
against Facebook, Google+, and other, smaller social networks,
then Facebooks acquisition wouldnt change the status quo,
anyway (the antitrust agencies cannot force firms to compete,
either legally or practically.)
Finally, a word about the size of the deal and the antitrust break-
up fee. The rumor is that Twitter had offered $500 million, but
Mark Zuckerberg boldly doubled the price and concluded the
deal in a weekend, which included a $200 million break-up fee
if antitrust regulators quashed the deal. In terms of antitrust
analysis, these facts could cut in either direction. Doubling
Instagrams price either could reflect strategic value, which is
business-speak for creating or enhancing market strength, or
could reflect a smart 28-year-old with a billion dollars to spend
who sees a great product. And the break-up fee could be
Instagrams ask, and Facebooks grant because it is confident it
will get antitrust clearance and not have to pay it.
Whatever happens, it will be interesting to watch the deal and
the antitrust agencies investigation unfold. This is about as
cool as we antitrust lawyers get to be.














India needs to focus more on digitalinfrastructure: James
Murdoch


With digitization, the Indian industry will finally have the
incentives to invest and create. Even more important, local
customers will have the content and choiceworthy of the
nations rich diversity

India has around 120 million TV households and yet there are
only about 30 million home which have digital channels. This
shows the need for the country to focus more on creating
digital infrastructure said James Murdoch, chairman and chief
executive, News Corp, Europe and Asia.

Speaking at the FICCI FRAMES 2011 in Mumbai today, he
said, "Digitisation brings content distribution and connectivity
together-and helps them come alive. That is whythe
nations most determined to modernise their economies have put
digitalinfrastructure at the top of their priorities. Digitization
needs funding, it's true. So it is crucially important to relax
investment and ownership regulations and align them to this
objective."

Though India has a large population, its creative potential
remains below expectations. "If India's economy had a creative
sector on the scale, relative to overall GDP, of Britain's, for
example, instead of a $15-billion industry we would be talking
about a $120-billion industry," Mr Murdoch said.

"Digitisation is the key to unlocking the potential of the creative
sector. With digitisation, the Indian industry will finally have the
incentives to invest and create. Even more important, Indian
customers will have the content and choice worthy of their
nation's rich diversity. The second area is what we can do to
bring Indian creators, storytellers, and journalists to the world's
conversations. And this can only be done by ensuring that
India's creative market is competitive at home," he added.

AT present there are 550 TV channels in the country out of
which around 400 are active. There are 106 channels which still
use the analogue system to broadcast signals to 90 million
homes. In addition, there are 300 TV channels ready to start
broadcasting the moment they get licenses. Due to the dearth of
digital infrastructure, broadcasters areforced to use analogue
system and pay more money as carriage fees.

Mr Murdoch said, "When competition is stifled
by infrastructure, the scarcity of bandwidth drives the operator
to price channel placement instead of investing in greater
capacity. This makes things more expensive for the
channel operator who has to recoup that higher cost out of
advertising, spread ever so thinly across a fragmenting
audience."

India is a young country-and there are more mobile devices than
TV sets in country. In order to reach out more to the audience,
content providers from the media need to cater to this segment
as well.
"In India, there is more demand and scope for content for
handheld devices," said Sachin Pilot, minister of state for
communications and IT. He assured all possible help to the
media and entertainment industry from the government.

During the inaugural session, FICCI and KPMG released a
report on Indian media and entertainment (M&E), which expects
the segment to grow at a compounded annual growth rate
(CAGR) of 14% to $28 billion by 2015, due to positive industry
sentiment and growing media consumption. (Read FICCI-
KPMG expects Indian media and entertainment industry to
touch $28 billion by 2015:).












Intel social media guidelines:

Social media is changing the way we work, offering a new
model to engage with customers, colleagues, and the world at
large. We believe this kind of interaction can help you to build
stronger, more successful business relationships. And it's a way
for you to take part in global conversations related to the work
we are doing at Intel and the things we care about.
These are the official guidelines for participating in social media
for Intel. If youre an Intel employee or contractor creating or
contributing to blogs, wikis, social networks, virtual worlds, or
any other kind of social media, these guidelines are for
you. They will evolve as new social networking tools emerge,
so check back regularly to make sure youre up to date.
Participation in social computing on behalf of Intel is not a right
but an opportunity, so please treat it seriously and with respect.
If you want to participate on behalf of Intel, take the Social
Media@Intel training and contact the Social Media Center of
Excellence. Please know and follow the Intel Code of Conduct.
Failure to abide by these guidelines and the Intel Code of
Conduct could put your participation at risk.
Contact social.media@intel.com for more information. Please
also follow the terms and conditions for any third-party sites.

1. Disclose
Your honestyor dishonestywill be quickly noticed in the
social media environment. Please represent Intel ethically and
with integrity.
Be transparent: Use your real name, identify that you work for
Intel, and be clear about your role.
Be truthful: If you have a vested interest in something you are
discussing, be the first to point it out and be specific about what
it is.
Be yourself: Stick to your area of expertise; write what you
know. If you publish to a website outside Intel, please use a
disclaimer something like this: The postings on this site are my
own and don't necessarily represent Intels positions, strategies,
or opinions.
2. Protect
Make sure all that transparency doesnt violate Intels
confidentiality or legal guidelines for commercial speechor
your own privacy. Remember, if youre online, youre on the
recordeverything on the Internet is public and searchable. And
what you write is ultimately your responsibility.
Don't tell secrets: Never reveal Intel-classified or confidential
information. If youre unsure, check with Intel PR or Global
Communications Group. Off-limit topics include: litigation,
non-published financials, and unreleased product info. Also,
please respect brand, trademark, copyright, fair use, and trade
secrets. If it gives you pausepause rather than publish.
Don't slam the competition (or Intel): Play nice. Anything you
publish must be true and not misleading, and all claims must be
substantiated and approved. Product benchmarks must be
approved for external posting by the appropriate product
benchmarking team.
Don't overshare: Be careful out thereonce you hit "share,"
you usually cant get it back. Plus being judicious will help
make your content more crisp and audience-relevant.
3. Use Common Sense
Perception is reality and in online social networks, the lines
between public and private, personal and professional are
blurred. Just by identifying yourself as an Intel employee, you
are creating perceptions about your expertise and about Intel. Do
us all proud.
Add value: There are millions of words out theremake yours
helpful and thought-provoking. Remember, its a conversation,
so keep it real. Build community by posting content that invites
responsesthen stay engaged. You can also broaden the
dialogue by citing others who are writing about the same topic
and allowing your content to be shared.
Keep it cool: There can be a fine line between healthy debate
and incendiary reaction. Try to frame what you write to invite
differing points of view without inflaming others. And you dont
need to respond to every criticism or barb. Be careful and
considerate.
Did you screw up? If you make a mistake, admit it. Be upfront
and be quick with your correction. If you're posting to a blog,
you may choose to modify an earlier postjust make it clear
that you have done so.
Contractors and Endorsements
As the Intel Social Media Guidelines describe, we support
transparency and are committed to clear disclosure of
relationships and endorsements. If you are contracted, seeded, or
in any way compensated by Intel to create social media, please
be sure to read and follow the Intel Sponsored, Seeded, or
Incentivized Social Media Practitioner Guidelines. As part of
these guidelines, you need to disclose that you have been seeded
or otherwise compensated by Intel. Your blog will be monitored
for compliance with our guidelines and accurate descriptions of
products and claims.
Moderation
Moderation (reviewing and approving content) applies to any
social media content written on behalf of Intel by people outside
the company, whether the site is on or off intel.com. We do not
endorse or take responsibility for content posted by third parties,
a.k.a. user-generated content (UGC). This includes text input
and uploaded files, including video, images, audio, executables,
and documents. While we strongly encourage user participation,
there are some guidelines we ask third parties to follow to keep
it safe for everyone.
Post-moderation: Even when a site requires the user to register
before posting, simple user name and email entry doesn't really
validate the person. So to ensure least risk/most security, we
require moderation of all UGC posts. The designated moderator
scans all posts to be sure they adhere to Intels guidelines.
Community moderation (a.k.a. reactive moderation): For
established, healthy communities, group moderation by regular
users can work well. This will sometimes be allowed to take the
place of post-moderationbut it must be applied for and
approved.
The house rules: Whether content is post-moderated or
community moderated, we use this rule of thumb: the Good, the
Bad, but not the Ugly. If the content is positive or negative and
in context to the conversation, then it can be approved,
regardless of whether its favorable or unfavorable to Intel. But
if the content is ugly, offensive, denigrating, and/or completely
out of context, then we ask our moderators and communities to
reject the content.
Intel Sponsored, Seeded, or Incentivized Social Media
Practitioner Guidelines
Intel supports transparency. We are committed to ensuring that
our social media practitioners (SMPs) clearly disclose
relationships and endorsements, and that statements about Intel
products are truthful and substantiated. If you are a social media
practitioner who has been seeded with product, incentivized, or
otherwise has an ongoing relationship with Intel, these
guidelines apply to you. If you have any questions or concerns
about them, get in touch with your Intel sponsor.
Please keep in mind that Intel monitors social media related to
our business, including the activities of our sponsored, seeded,
or incentivized SMPs. If we find any non-disclosed relationships
or statements that are false or misleading, we will contact you
for correction. If, as a sponsored SMP, you are found to
repetitively make inaccurate statements about Intel, Intel
products, or Intel services, we may discontinue our relationship
with you.
Rules of Engagement for Intel Sponsored, Seeded, or
Incentivized SMPs
Be transparent: Please clearly and conspicuously disclose your
relationship to Intel, including any incentives or sponsorships.
Be sure this information is readily apparent to the public and to
readers of each of your posts.
Be specific: Do not make general claims about Intel products,
but talk specifically about what you experienced.
Be yourself: We encourage you to write in the first person and
stick to your area of expertise as it relates to Intel technology.
Be conscientious: Keep in mind that what you write is your
responsibility and failure to abide by these guidelines could put
your Intel sponsorship or incentive at risk. Also please always
follow the terms and conditions for any third-party sites in
which you participate.
Crafting social policy :

Whether your company is taking a first crack at writing a policy, or needing to freshen an old one, here
are some tips to successfully create and maintain a social media policy.

iStockphoto/photosipsak
For a long time, PGAV Destinations just didn't need to get into social media. The firm, which designs attractions for zoos,
museums, aquariums, and cultural sites, has been in business since 1967, and to this point, never felt the push to jump
online.
"It's not really a super large industry, so it's easy to identify your clients and your market, and find them and talk to them
about your services," said PGAV's Director of Business Development and Research Ben Cober.
But now, thanks to the growing market and opportunities only the internet can offer, the firm is ready to make its foray into
social media. In the ramp up, Cober helped the company put together a social media policy to guide the company and its
employees in social spaces on the web.
To assist other companies, we've put together several points to remember when building a social media policy that, as
Gartner analyst Jennifer Polk put it, creates "expectations with a healthy dose of what can be monitored, managed, and
enforced realistically."
1. Understand your workforce
Polk said it's important to acknowledge that your employees are using social media, whether for personal use or not, at
home or at work. Email communications product Contatta, also found itself creating social media policy, recently. Director of
Communications, Brenda Christensen said the company took into consideration the fact that many employees not only had
experience online, but had established presences on social media. "I wanted to have respect for that instead of coming
down from the mountain top with the two tablets and saying, 'These are the 10 social commandments,'" she said.
2. Understand your own needs
For Cober, when thinking of what to include in the social media policy, he had to think of the nature of his company's
industry. "A lot of the theme parks like to keep very top secret their really exciting, great rides that are coming out in two,
three, four years, so we need to be very careful about how we converse with the public, with our clients about what we do
and what we work on," he said.
Merely mentioning a specific client is working with PGAV might clue in a competitor that the park is planning something. On
the more serious end, Tatiana Melnik, an attorney who specializes in information technology and intellectual property, talked
about how businesses like medical practices have to be aware of how their social media policies play into their industry's
legal regulations, like HIPAA compliance.
Cober also said they looked at social media policies for organizations like the American Institute of Architects and
the Smithsonian to see what might also be applicable.
3. Be collaborative where possible
Being collaborative can work in two ways. On a practical level, Polk recommends bringing together departments like legal,
human resources, and marketing into discussions of how social media should be used (and not used), how the company
should be discussed (and not discussed) and what should be expected (and not expected) from employees.
For a company launching its first policy, being collaborative with employees can also help the implementation of the policy.
Christensen sought input from employees who are bloggers, or already have online followings. "If you open it up for
collaboration internally and have people contribute to a document, it gives them a sense of ownership," she said.
Melnik also said that running the policy by a technical department can help determine if the things that the company might
want to do, like blocking sites, perhaps, or using certain filters, is actually possible, even from a financial perspective. "You
don't want to promise you're going to be doing something that you're not doing," she said.
4. Balance the "can" and "can't"
Cober said his company decided to split the policy into two documents. The first is the hard and fast rules -- the actual policy
that employees need to abide by if they plan on engaging in social media in any way. This includes but is not limited to items
like being transparent and identifying as a company employee, don't comment on behalf of the company, or start social
media accounts on behalf of the company, and not checking in via social media at client sites. After all, a corporate policy is
a corporate policy. The second is guidelines containing best practices like encouraging employees to always add value and
write well.
The company's social media policy and guidelines also include an explanation. "I think that really helps for anyone who has
to adopt any kind of social media policy, like how families have family rules -- when you understand why the rules are in
place, it's a lot easier to get on board with them," he said.
Along those lines, Christensen said Contatta also offers guidelines that respect employees' social styles, but acknowledge
that the company also has a corporate style and voice of its own that has to be maintained, as well as advice on how to do
that while interacting with the brand on social media. Polks calls these "constructive guardrails."
5. Don't get hung up on platforms
Polk said that with larger companies, there can be the need to keep the policy somewhat vague, as it's futile to try and not
only predict but police every situation. "You never build a social media policy or strategy based on platforms, you always
base it on communications, just like you would for any other part of your strategy, because platforms change and evolve,
they come and they die," Cober said. The consistency at the policy's foundation will give the policy a longer life.
6. Run it by legal
Melnik outlined a few areas where having a lawyer review the social media policy is important. For one, a lawyer can review
all existing policies and make sure the social media policy does not create any contradictions. If an employee handbook
forbids any discussion of a company, then there's no sense in a social media policy that advises on how to talk about the
company online.
A lawyer can also catch potential problems, like encouraging hourly employees to help promote the company when they're
technically not on the clock, or checking for any applicable state laws with which the company should comply.
Melnick also brought up The National Labor Relations Board. "That's something that companies really need to be aware of,
because in the last couple years, the NLRB has been very active in pursuing companies who they see as violating employee
rights to discuss their working conditions," she said.
7. Distribute it
For some companies, their social media policy is rolled into codes of conduct. That can mean that employees don't
necessarily see the policy again. Polk encourages making sure current employees are familiar with a new policy, and stay
informed of any changes in the future. Contatta was able to use its own product, which Christensen said is a blend between
Hootsuite, Contact Manager, and Yammer to distribute the policy to employees, as well as set up workrooms where
employees could chime in. "It's not possible to over-communicate these types of things," Christensen said.
PGAV's policy is still being reviewed by legal. Cober said they will most likely have employees sign the policy, as well as
hold a period of time where they can ask questions about the policy. The company also has sessions called "lunch and
learn." Their new social media policy could possibly be an upcoming topic of the event.
8. Update it
Once the policy is written, it's important not to abandon it. Depending on issues and usage, Polk recommended an annual
review. "This is a living, breathing document that we all contribute to and that we'll modify as things change and progress, so
make it an ongoing collaborative process," Christensen said.