The Federal Trade Commission (FTC) recently opened an inquiry into the legality of these types of mega deals in multiple industries, including potential mergers in Hollywood. The investigation began on January 18 and is being done in conjunction with the Department of Justice (DOJ).
“Illegal mergers can inflict a host of harms, from higher prices and lower wages to diminished opportunity, reduced innovation, and less resiliency,” FTC Chair Lina M. Khan said in a press release. “This inquiry launched by the FTC and DOJ is designed to ensure that our merger guidelines accurately reflect modern market realities and equip us to forcefully enforce the law against unlawful deals.”
This push for merger regulation was initially started by the Biden administration and marked a turnaround from what The Hollywood Reporter called “decades of lenient enforcement” within the entertainment industry.
“We’re currently going through a truly unprecedented explosion [in merger requests],” Assistant Attorney General Jonathan Kanter said in a statement, adding that the deals showed “no signs of slowing down.”
The deal remains pending, but if finalized, it would mark a significant milestone for the business of the entertainment industry.
In the meantime,the FTC’s inquiry will seek to determine if the purchase would potentially violate antitrust regulations.
Antitrust law in the United States requires corporations to provide the FTC and Justice Department with advanced notice of any acquisition totaling $101 million or more. The two parties will then proceed with a 30-day review period to analyze the potential economic outcomes of the merger.
The Justice Department listed more than 3,500 merger requests in 2021, reportedly the most in the modern history of antitrust regulation. It is unclear how many of these were related to the entertainment industry.
Among other notable Hollywood mergers was a recent agreement from WarnerMedia to join with Discovery in a titanic $43 billion deal. WarnerMedia’s parent company, AT&T, stated that the merger could close by this April, but it is still awaiting regulatory approval.
