Digital disruption demands antitrust restraint

Posted By The Hill

Digital disruption demands antitrust restraint

By Jonathan Barnett 

Since Nov. 20, the date on which the Department of Justice Antitrust Division launched its challenge to the AT&T-Time Warner merger, through June 27, the date on which the division announced its conditional approval of the Disney-Fox merger, the media and entertainment marketplace has been peering deep into the legal crystal ball to anticipate the antitrust fortunes of these two landmark transactions.

For those who reflexively follow the “big is bad” principle, the Antitrust Division’s aggressive challenge to the AT&T-Time Warner combination was a welcome surprise while its failure to challenge the Disney-Fox combination in its entirety was a predictable disappointment.

Yet, courts demand persuasive evidence that a combination will likely result in net harm to consumers — an economic translation of the statute’s prohibition of only combinations where “the effect … may be substantially to lessen competition.”

Absent this evidentiary safeguard, dealmakers could not assess regulatory risk and firms would shy away from acquisitions that can enhance shareholder value and benefit consumers.

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