The logic between “regulatory risk” and antitrust review of media mergers

The Antitrust Division of the Justice Department appears to have put its thumb on the scale in the ongoing battle between the Walt Disney Company and Comcast over the assets of 21st Century Fox. On June 27, the division approved the transfer to Disney (with conditions) despite the fact Comcast was still bidding. Disney had previously argued to the Fox board of directors that their merger faced less regulatory risk than Comcast’s. The Disney-Fox combination would produce a larger horizontally-integrated company and one that would typically pose the greater risk. But Disney argued that because Comcast is also an internet service provider (ISP), the government would have heightened concerns based on the ability of that network to discriminate among users. The problem with this argument is that the Trump administration has already taken the “ISPs can discriminate” assertion off the table.

[Wheeler is a Brookings Visiting Fellow and former chairman of the Federal Communications Commission]