Mother may I? Antitrust and the Disney/Star Wars deal
The buyout announcement was big news: Disney would acquire the assets of Lucasfilm. Jokes abounded on the Internet about changes Disney might make to the iconic Star Wars universe: Would one of the three planned movie sequels feature a song like “When You Wish Upon a Death Star”?
By contrast, the merger approval was small news: a short item in the Washington Post, indicating that the Federal Trade Commission had okayed the transaction. It goes to show just how many of antitrust’s coercive practices operate off-screen, as it were, taken for granted by all concerned and hardly deemed newsworthy.
Antitrust law requires notification to the FTC of every contemplated transaction that exceeds a certain dollar amount. Of course, this means that only relatively successful companies fall under FTC scrutiny. And it’s not just a matter of notification—there’s a mandatory waiting period (30 days, subject to extension), while the FTC decides if it’s going to allow the transaction to go forward.
Oh, yes—you can ask the FTC to give its go-ahead without waiting 30 days. But a so-called early termination only happens when both the FTC and the Antitrust Division of the Justice Department have completed their reviews and decided not to take enforcement action. There’s even a website where companies can check every day for grants of permission.
Remember when you had to ask your mother for permission to cross the street? Today, America’s most successful businessmen and shareholders find themselves stuck in a similar position, forced to beg for Uncle Sam’s permission before consummating merger transactions that advance their financial self-interest.
It’s a “Mother may I?” economy, fueled by the basic premise behind antitrust—the idea that the more market success a company achieves, the greater threat it poses to consumers and the economy. After all, when federal law regards every businessman as an incipient criminal who must be tethered and tamed by government coercion, notifications and waiting periods make perfect sense, right?