Hart-Scott-Rodino Antitrust Improvements Act Of 1976

Think: Anti-Trust (for the Modern Era).

Trusts happen when one company, or a network of companies, gets so much market share in an industry that they can dictate pricing. They've elbowed everyone else out, and now they can dictate terms to consumers. Fundamentally, they've become a monopoly.

Antitrust laws are meant to prevent these circumstances. In the extreme, the government can use the rules to break up companies that get too big (as happened with Standard Oil or AT&T).

Usually, though, the laws are used to prevent monopolies from forming in the first place. The government can review mergers to make sure that the combined company (meaning the company that will exist following the merger) isn't so big that it virtually takes over an industry.

A number of antitrust laws were put on the books during the late 1800s and early 1900s. The Hart-Scott-Rodino Act was an update of those laws. Passed in 1976, it's meant to give the government more time to review potential blockbuster mergers by requiring large companies to inform the Federal Trade Commission when they plan to make a substantial acquisition.

So, rather than having the merger get completed and then the government stepping in afterward, the Hart-Scott-Rodino rules let the government look at the deal before it closes.

GloboTechDyneMassCom plans to merge with InterMacroSpectroFlex, a deal which would form, by far, the largest company in the mass spectro techno sector. Before the deal closes, the companies have to file an HSR notification. Then there's a 30-day waiting period while the government looks into the merger.

The government then has a few options. It can simply let the waiting period expire, meaning that the companies are free to close the deal. Or it can take action to prevent the merger, if it thinks it violates antitrust statutes. Or it can terminate the waiting period early, letting the deal close before the original 30-day period ends. Or it can ask for more info and extend the waiting period.

In this case, no one in the government can figure out what the mass spectro techno sector is. The functionaries reviewing the case initially asked for more information to try to figure it out, but they couldn't understand those documents either. Rather than let things get really embarrassing, they eventually shrug and let the merger go through.