FTC v Blockbuster

Case Study

On December 28, 2004, Blockbuster, Inc. (Blockbuster) revealed its intention to acquire Hollywood Entertainment Corporation (Hollywood) for roughly $1 billion. At that time, Blockbuster operated about 4,600 corporate video rental locations and 1,800 franchises throughout the U.S., generating an estimated $4.2 billion in revenue. In contrast, Hollywood managed nearly 2,000 video rental outlets in the U.S., with estimated revenues of $1.8 billion. However, on March 4, 2005, the Federal Trade Commission (FTC) intervened by filing an injunction to block the acquisition. On March 26, 2005, Blockbuster decided to withdraw from its acquisition.