Facebook Buys Instagram

According to information coming to light today, Instagram chief executive Kevin Systrom may not have been completely forthright with his testimony before the Federal Trade Commission when seeking approval of the purchase by Facebook.

When it was announced that Facebook intended to acquire Instagram for $1 billion, it instantly triggered the need for investigation by several government bodies due to the dollar amount associated with the deal. The Federal Trade Commission (F.T.C.) was one of the first to step up, and the deal was eventually cleared. However, new information has come to light today from The New York Times that suggests not everything is quite as clean cut as it once appeared.

During chief executive Kevin Systrom’s testimony, he was asked three times if Instagram had received any other interest or offers from third-parties other than Facebook about acquiring the photo sharing service. He responded each time in the negative.

Sources from both sides of a failed deal that spoke with the Times are now saying that as near as three weeks before, Instagram and Twitter had verbally agreed to a purchase price of $525 million in cash and Twitter shares. They went on to say that Systrom and Mike Krieger, co-founder of Instagram, held multiple meetings in March of this year with Twitter to discuss the potential purchase. As of March 20, Systrom is said to have told Twitter that Instagram had decided to stay independent, but a mere three weeks later the deal with Facebook was announced and no chance had been given to Twitter to make a counter-offer.

No one from Facebook, Instagram, Twitter or the F.T.C. would give an official statement on the matter.

Should any of this prove to be true, Systrom could potentially be facing perjury charges as his testimony was given under oath to the F.T.C. In addition, there is the potential for fraud charges when an inaccurate statements given to investors according to University of California law professor Eric Talley.

There is no word as of yet if any charges will be pursued against any of the involved parties as all of this has been done anonymously so far, but it won’t be surprising to hear of some inquiries being made soon.