AT&T-Time Warner Ruling Shows a Need to Reboot Antitrust Laws – by James B Stewart – NYT

“The last time there was an antitrust ruling as important as the one handed down Tuesday by Judge Richard J. Leon, cellphones didn’t exist. There was no such thing as the internet. Personal computers were years away from mass adoption.

There had not been a federal court ruling on a vertical merger — a combination of a buyer and a supplier — since 1979. As a result, Judge Leon’s opinion, which cleared the way for the merger of AT&T and Time Warner, “will be enormously significant,” said Herbert Hovenkamp, an influential antitrust professor at the University of Pennsylvania. “To a significant extent, this court was writing on a clean slate.”

Judge Leon himself cited a “dearth” of modern judicial precedent.

For many antitrust experts, it was high time — no matter the outcome.

When it comes to vertical mergers like AT&T and Time Warner, “antitrust law is stuck in the 1980s,” said Tim Wu, a professor at Columbia Law School who has called for more vigorous antitrust enforcement against vertical mergers.”

David Lindsay Jr.
David Lindsay Jr.
Hamden, CT | Pending Approval NYT comments
“. . . If AT&T wants to withhold “must have” programming from a rival telecom company, or charge more for it, that company cannot readily replace it. That was the crux of the government’s case — that vertical mergers, at least in this context, can reduce competition and harm consumers. “The big question was whether Judge Leon would accept where academics and economists have gone with this, or whether he’d stick with the old approach,” said Mr. Wu, the Columbia law professor, who is also a contributing opinion writer for The New York Times.”
I side with Tim Wu, and economists looking at the danger of price gauging. Common sense to me suggests that fewer and fewer mega corporations will reduce the power of consumers against monopoly and monopsony, single seller and single buyer. Since Amazon and Facebook, for example, buy any company that rises to challenge them, they both should be broken up, starting with, a cutting off of most of their acquisitions.
Amazon’s cutthroat hostile take over of Diapers.com is proof that our anti-trust laws need to be modernized and strengthened, or at least, more rigorously enforced.
David Lindsay Jr.’s father worked in the anti-trust division of the US Treasury in the Eisenhower administration.
David Lindsay Jr. is the author of “The Tay Son Rebellion, Historical Fiction of Eighteenth-century Vietnam,” and blogs at TheTaySonRebellion.com and InconvenientNews.wordpress.com
Advertisements

Is It Last Call for Craft Beer? – by Jim Koch – NYT

“We have seen a dramatic consolidation in our industry in recent years. It started in 2008 when the Department of Justice approved the creation of a duopoly in the beer industry by greenlighting a joint venture between Molson Coors and SABMiller (creating MillerCoors) and, five months later, the merger of Anheuser Busch and InBev.

Overnight, about 90 percent of domestic beer production was in the hands of two foreign-owned brewing giants. (The consolidation continued in 2016, when regulators approved the merger of SABMiller and AB InBev; SABMiller sold back its stake in MillerCoors, creating a new duopoly between Molson Coors and AB InBev.)”

“This unwillingness to use effective antitrust enforcement to protect American economic interests is in stark contrast to how the rest of the world operates. Before approving AB InBev’s latest merger, antitrust authorities in China required it to sell its $1.6 billion stake in China’s largest brewer back to the Chinese government at a bargain-basement price. South Africa required guarantees of lifetime employment for its citizens, and the Monopolies Commission in the European Union required divestitures by SABMiller and AB InBev to keep their new, combined market share to 9 percent.”

We need to stop the madness of consolidation, to make the rich richer, while more and more Americans lose their jobs. The antitrust department of the Treasury needs to be empowered to protect jobs, and keep competition vibrant.