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
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