With AT&T and Time Warner, Battle Lines Form for an Epic Antitrust Case
- 6 years ago
With AT&T and Time Warner, Battle Lines Form for an Epic Antitrust Case
But in the past few years, as the internet has disrupted traditional media companies
and prompted some high-profile mergers, there has been a growing sense “that antitrust enforcement has been too lenient,” said Maurice Stucke, an antitrust professor at the University of Tennessee College of Law and a co-author of the article “Antitrust and the Marketplace of Ideas.”
Referring to Louis D. Brandeis, the former Supreme Court justice, he said, “There’s a populist, Brandeisian movement that’s rising.”
President Trump tapped into that sentiment during the campaign when he described the proposed AT&T-Time Warner combination as “a deal we will not approve in my administration
because it’s too much concentration of power in the hands of too few.”
That’s a view shared by many progressive media critics, including an influential group of young antitrust professors
who have been calling for stricter review of vertical mergers, especially in media and entertainment.
The Justice Department’s merger guidelines don’t rule out divestitures in vertical merger cases, but suggest
that “tailored conduct remedies” can protect consumers “while still allowing the efficiencies that may come from the merger to be realized.”
A study by the Federal Trade Commission found that concerns about every vertical merger examined by the commission from 2006 to 2012 were resolved through “conduct remedies” rather than divestitures, and
that all these remedies had been successful at protecting competition.
That’s because the combination of AT&T and Time Warner is what’s known as a “vertical” merger, meaning
that the two companies don’t compete to any significant degree in their primary lines of business, which are telecommunications (AT&T) and entertainment (Time Warner).
But in the past few years, as the internet has disrupted traditional media companies
and prompted some high-profile mergers, there has been a growing sense “that antitrust enforcement has been too lenient,” said Maurice Stucke, an antitrust professor at the University of Tennessee College of Law and a co-author of the article “Antitrust and the Marketplace of Ideas.”
Referring to Louis D. Brandeis, the former Supreme Court justice, he said, “There’s a populist, Brandeisian movement that’s rising.”
President Trump tapped into that sentiment during the campaign when he described the proposed AT&T-Time Warner combination as “a deal we will not approve in my administration
because it’s too much concentration of power in the hands of too few.”
That’s a view shared by many progressive media critics, including an influential group of young antitrust professors
who have been calling for stricter review of vertical mergers, especially in media and entertainment.
The Justice Department’s merger guidelines don’t rule out divestitures in vertical merger cases, but suggest
that “tailored conduct remedies” can protect consumers “while still allowing the efficiencies that may come from the merger to be realized.”
A study by the Federal Trade Commission found that concerns about every vertical merger examined by the commission from 2006 to 2012 were resolved through “conduct remedies” rather than divestitures, and
that all these remedies had been successful at protecting competition.
That’s because the combination of AT&T and Time Warner is what’s known as a “vertical” merger, meaning
that the two companies don’t compete to any significant degree in their primary lines of business, which are telecommunications (AT&T) and entertainment (Time Warner).