Justice Whacks Pixar-Lucasfilm|Agreement as Antitrust Violation

WASHINGTON (CN) - The Justice Department sued Lucasfilm in an antitrust complaint for its agreement with Pixar not to raid each other's employees. The movie studios should "compete for highly skilled digital animators," but the deal they cut reduced competition and "disrupted the normal price-setting mechanisms that apply in the labor setting," according to the complaint. The government also filed a proposed settlement that would run for 5 years.

"Lucasfilm and Pixar entered into an agreement not to cold call, not to make counteroffers under certain circumstances, and to provide notification when making employment offers to each other's employers," according to the federal complaint. "This agreement reduced Lucasfilm's and Pixar's ability to compete for employees and disrupted the normal price-setting mechanisms that apply in the labor setting. This agreement is facially anticompetitive. It eliminated significant forms of competition to attract digital animators and, overall, substantially diminished competition to the detriment of the affected employees who likely were deprived of competitively important information and better job opportunities.

"Lucasfilm's and Pixar's agreement is a restraint of trade that is per se unlawful under Section 1 of the Sherman Act, 15 U.S.C. §1. The United States seeks an order prohibiting such an agreement."

The complaint claims that Lucasfilm and Pixar cut their deal in or around January 2005. Pixar complaint twice to Lucasfilm in 2007, and the complaints "led the parties to modify their conduct going forward to conform to the agreement," Uncle Sam says.

The complaint does not state why only Lucasfilm was named as a defendant.

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