Media merger basics: A primer on Fox, Disney, Comcast, Sky, AT&T, and Time Warner

[Commentary] AT&T-Time Warner: The merger is vertical in nature, whereas the Disney-Fox merger is horizontal. But AT&T-Time Warner is a key merger from which to gather clues about the Department of Justice’s antitrust enforcement priorities under the new leadership of Makan Delrahim. Again, vertical mergers historically have been treated as either beneficial to consumers or having an ambiguous or benign impact on consumer welfare. Yet the proposed vertical merger is subject to a DOJ court action to block the merger. Relevant to future mergers, the DOJ action may be driven less by whether the merger is horizontal or vertical and more by whether any potential problems may be lessened by “structural” versus “behavioral” remedies.

The problem with behavioral remedies, as noted by many, including Delrahim himself, is that (in Delrahim’s words) they “often require companies to make daily decisions contrary to their profit-maximizing incentives and they demand ongoing monitoring and enforcement to do that effectively.” It is important to view the possible shift to structural remedies as a shift in preference between two traditional categories of antitrust remedies. It does not (yet) reflect a change in traditional, economic analyses of the underlying merge

[Babette Boliek is an associate professor of law and the associate dean of Faculty Research and Development at Pepperdine University School of Law.]