Broken Promises: Media Mega Mergers and the Case for Antitrust Reform

Shining a light on failed antitrust policy through a review of five mega mergers in the media and telecommunications industry: Comcast and NBCUniversal; AT&T and DirecTV; AT&T and Time Warner; Charter, Time Warner Cable and Bright House; and Disney and Fox. Each case study details the history and aftermath of these mergers, contrasting the companies’ promises of consumer benefits and pro-competitive outcomes with the post-merger realities, including higher prices, reduced choices, and harms to writers. The report concludes with policy recommendations to reform the merger review process and increase antitrust enforcement efforts:

• Codify an alternative to the consumer welfare standard that clearly prioritizes the maintenance of competitive market structures for consumers, competitors, and new entrants.
• Reintroduce structural presumptions and bright-line rules in vertical and horizontal mergers, including a presumption against dominant firms acquiring nascent or potential competitors. Shift the burden of proof onto merging parties, minimize weight given to “efficiencies” arguments, and eliminate the use of behavioral conditions in merger approvals.
• Lower barriers to prove antitrust violations including greater deference to direct evidence of market power or anticompetitive effects, and establish that erroneous non-enforcement is a greater threat to competition than erroneous enforcement.
• Conduct regular merger retrospectives and market investigations. Such investigations must allow for corrective measures up to and including structural separations and unwinding mergers proven anticompetitive after the fact.
• Review effects on workers in every merger and market investigation. Antitrust law and rules should include specific guidance for evaluating labor market effects and monopsony power.
• Enhance enforcement against abuses of dominance such as self-preferencing, discriminatory conduct, tying, and predatory pricing.
• Increase funding for antitrust enforcers and empower them with clear jurisdiction to regulate anti-competitive behavior in concentrated markets.