Posted by The Hill
The emerging Trump doctrine on mergers and antitrust
Wall Street regaled the election of Donald Trump. Conventional wisdom suggested the new president would hector a new era of growth and deregulation, especially for industries complaining of Obama’s heavy hand. Banking, finance, and telecom companies all looked forward to the lifting of erstwhile rules that were, according to the president, disincentives to growth. Investment capital, parked on the sidelines for years, revved up the engine in anticipation of little — or light touch — regulation.
Wall Street has not been disappointed. The market is way up; rates are stable; money is abundant, and growth is steady. Strict regulations are giving way to easier new rules, or no rules at all. The spirit of deregulation abounds.
Nowhere has this been more manifest than in the telecom, media and technology sector, where the chairman of the Federal Communications Commission promised to “fire up the weed whacker and remove those rules that are holding back investment, innovation and job creation.” With serial precision, Chairman Ajit Pai has cut down Obama-era rules on media ownership, privacy and so-called net neutrality rules for internet service providers. For this he has been praised by the industry but pilloried by the public interest bar.
But all is not well in the big-dollar world of media mergers. While the FCC may be singing a familiar song, there is a discordant tune over at the Department of Justice, where signs of inconsistent decisions are emerging. First, DOJ sued to stop the $85 billion AT&T-Time Warner merger. Next, it scrutinized the $4 billion Sinclair-Tribune deal, requiring what some see as unreasonable divestitures.
So far there has been no notable reaction to the proposed $15 billion Discovery-Scripps deal, or the $2.8 billion Meredith-Time, Inc. merger. And then there is the $66 billion Disney-Fox deal, which the president initially said, “would be good.” But that, too, could change.
The fact is that each of these mergers has its own merits and “would be good” for a lot of reasons. But those merits have been overlooked by the Justice Department’s inconsistency. If investors value anything other than high returns, it is predictability. But therein lies the disconnect, because the DOJ approach has been anything but predictable. It was once conventional wisdom that vertical mergers — those between companies that do not compete against each other — posed no threat to competition. This axiom was burnished into the pillars of antitrust law, providing reliable precedent on many deals for decades.
Featured News
French Regulator Meat-Cutting Sector Case Following Antitrust Review
May 15, 2024 by
CPI
Arizona Attorney General Files Suit Against Amazon Over Unfair Business Practices
May 15, 2024 by
CPI
Varsity Spirit and Private Equity Owners Settle Class Action Antitrust Suit
May 15, 2024 by
CPI
US Senators Present AI Strategy, Call for Funding Surge
May 15, 2024 by
CPI
Hausfeld Strengthens Competition Bench with Key Hires in London and Germany
May 15, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Ecosystems
May 9, 2024 by
CPI
Mapping Antitrust onto Digital Ecosystems
May 9, 2024 by
CPI
Ecosystems and Competition Law: A Law and Political Economy Approach
May 9, 2024 by
CPI
Ecosystem Theories of Harm: What is Beyond the Buzzword?
May 9, 2024 by
CPI
Open Ecosystems: Benefits, Challenges, and Implications for Antitrust
May 9, 2024 by
CPI