Crossed Lines: Why the AT&T-Time Warner Merger Demands a New Approach to Antitrust
As federal agencies examine the potential consequences if the AT&T - Time Warner merger is allowed to proceed, how we analyze antitrust also needs to be reevaluated.
A new report from the Roosevelt Institute takes a closer look at how antitrust enforcement philosophy has changed, how that change has enabled our current state telecommunications in which a few large anticompetitive players control the market. The authors offer recommendations and cautionary predictions that may arise if we continue without reassessing how we scrutinize these large scale mergers.
Authors Marshall Steinbaum and Andrew Hwang complement each other with economic and legal approaches. Steinbaum is Senior Economist and Fellow at the Roosevelt Institute and has also written for Democracy, Boston Review, The American Prospect, and The New Republic. He earned his Ph.D. from the University of Chicago Economics Department in 2014. Hwang is a legal fellow at the Roosevelt Institute and has also been an associate at Simpson Thacher & Bartlett LLP, working on transactions involving securities issuance, mergers and acquisitions, and corporate lending. He received his J.D. from the Duke University School of Law in 2014 and B.A. in economics and political science from the University of Chicago in 2011.
The report notes how scrutiny of mergers has come to depend on the perceived harm the results will have on consumers, but such a narrow focus results in harming competition.
Instead, regulators should adopt a more holistic view of market power, specifically incorporating analysis of upstream impact of anticompetitive behaviors, especially those enabled by mergers. This would entail closer scrutiny of vertical mergers, positive price discrimination, and non-price-based schemes to profit excessively by withholding access to consumers.
Several specific recommendations caught our attention as particularly relevant approaches, including:
Regulators should utilize Section 2 of the Sherman Act to a greater degree by taking enforcement actions against antitrust violators, up to and including undoing previous mergers that have proven anti-competitive after the fact.
