Why the Comcast/NBC Merger Poses a Major Threat to Video Competition that Antitrust Authorities Cannot Ignore
Originally published: December 6, 2009
Last updated: December 6, 2009 - 12:17pm
Press reports generally indicated a merger of Comcast and NBC Universal would win regulatory approval. However, those who would claim that approval of the Comcast/NBC merger is a foregone conclusion have not undertaken the careful market definition and competitive analysis that the federal authorities must do pursuant to antitrust laws. Far from being a cakewalk, this merger raises the most basic antitrust issues in an emerging space that the Obama administration has declared to be of particular importance. Moreover, given President Obama's criticism of the Justice Department's weak antitrust record during the previous administration, vigorous oversight of anticompetitive conduct — particularly of that involving vertical mergers and innovation focused industries — should be expected. Additionally, to the extent that this combination involves broadcast and cable issues, the Federal Communications Commission is also likely to scrutinize the public interest and competitive impact of the merger. A vertically integrated Comcast/NBC would not only control marquee television and movie content, it would also control the primary avenues for distributing that content: a major television broadcast network, a major cable system operator and a major broadband Internet access provider. Because the merged entity would control both content and distribution, it would have both the incentive and the market power to limit the access of competing content to the distribution platforms it controls. It would also have the power to enforce anticompetitive bundling and pricing of its own programming, or in some cases, to deny its competitors access to its programming altogether.
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