James Stewart

[Commentary] In 2017, I predicted the government’s case to block the merger of AT&T and Time Warner would most likely be the antitrust case of the decade.

[Commentary] If the government goes to court to block the merger of AT&T and Time Warner, as seems increasingly likely, it may well be the antitrust case of the decade, even without the claims of presidential meddling that have already engulfed the deal in partisan controversy. A lawsuit by the Justice Department, along with its earlier, widely reported demands that AT&T sell either DirecTV or Turner Broadcasting to gain approval for the deal, would mark a radical departure from decades of antitrust enforcement policy, both in defining what is an unlawful anticompetitive merger and

Opponents of the proposed AT&T purchase of Time Warner don’t want to just block the $84.5 billion deal: They want to overturn decades of antitrust policy and case law. Until recently, that would have been all but unthinkable. But in today’s superheated and politically charged environment, they may just succeed.

Politicians were piling on recently to criticize the deal, including Donald Trump and Sen Tim Kaine (D-VA), the Democratic nominee for vice president. “Over the last 40 to 50 years, antitrust law has evolved to be almost completely indifferent to vertical mergers,” said Tim Wu, an antitrust and internet expert at Columbia Law School who coined the phrase “net neutrality” and recently wrote “The Attention Merchants” on the advertising business. In vertical mergers, a company buys a supplier; in horizontal mergers, direct competitors combine. But the new generation harks back to the original trustbusters of the early 20th century, who were most concerned about preventing corporations from gaining too much power. “The antitrust system as it stands is focused on prices to consumers, innovation and efficiencies,” Wu said. “That reflects the triumph of the University of Chicago school of economics. But there’s an older tradition, embodied by Supreme Court Justice Louis Brandeis, that says a concentration of too much power in too few hands is bad for democracy and bad for consumers.”

Regulators in Washington won not one but two major merger battles -- without even firing a shot. In telecommunications, Sprint abandoned a bid for its rival T-Mobile.

And in media and entertainment, 21st Century Fox dropped its pursuit of Time Warner. Both deals were proposed mergers of direct competitors, which often reduce competition and, as a result, usually attract heightened scrutiny from regulators.

In neither case did the Justice Department or the Federal Communications Commission announce a formal position, and in Fox’s bid, the antitrust division and the Federal Trade Commission, which share jurisdiction, hadn’t even decided which agency would conduct the inquiry. But the threat of action may have been enough -- certainly so in Sprint’s case, and at least something that had to be seriously considered in Fox’s case.

[Commentary] A merger between 21st Century Fox and Time Warner would reduce control of the major Hollywood studios to five owners, from six, and major television producers to four, from five.

Fox and Time Warner may no longer publish old-media newspapers or magazines, but they certainly disseminate information and opinions that may be even more vital to the “welfare of the public” today than the newspapers of Supreme Court Justice Hugo Black’s era.

How many news shows and opinion panels would be produced on TV under the ownership of a Rupert Murdoch, or for that matter, any other media mogul who controlled close to 40 percent of all major film production and nearly 20 percent of all television?

To look only at price competition and economic efficiency “makes no sense whatsoever” in the media context, added with Maurice Stucke, a law professor at the University of Tennessee. He posits that any analysis of competition in media mergers should include the impact on “the marketplace of ideas,” where competition “advances truth.”