Should the federal antitrust laws be amended, or should law enforcement agencies do a better job of enforcing existing statutes? That question underpins the upcoming Senate Subcommittee on Antitrust hearing about the current legal standard applied in antitrust law, one that primarily asks whether consumers will be harmed by a proposed merger or existing dominant firm. Among the witnesses scheduled to testify is Barry Lynn, who heads the Open Markets Institute, a notable force in the ongoing debate about antitrust, market concentration, and American society. Mr. Lynn probably will argue that the antitrust laws should be amended and expanded, in contrast to some of the other witnesses, who are likely to argue the opposite. Since the Open Markets website says it is expressly focused on “political and economic dangers of monopolization” and “consolidation,” Democrats on the panel, including Ranking Member Amy Klobuchar (D-MN), should ask Mr. Lynn some incisive questions about recent mergers about which Open Markets has been relatively silent. Here are three suggestions:
- Health care. Your organization criticizes consolidation in the healthcare industry as an example of why market concentration harms consumers. However, I could not find any analyses by Open Markets or you about the recently announced mega-merger between CVS and Aetna (news broke of this deal on 26 October, and it was confirmed on 3 December). Why not? Could this merger threaten consumers with higher drug prices and even less competition in the already concentrated local insurance markets? If the Department of Justice Antitrust Division could sue to block the AT&T/Time Warner merger, which AT&T argues combines two firms in two different markets (i.e., “vertical” integration), why couldn’t the DOJ under existing antitrust statutes try to block the CVS/Aetna merger, which some argue also is vertical?
- Telecommunications. Speaking of telecommunications, it seems that Open Markets has been rather quiet about consequential mergers in this space. For example, I don’t see any statements from Open Markets about CenturyLink’s acquisition of Level3, consolidating major backhaul providers to the concern of other public interest groups. Open Markets also said nothing about the AT&T/Time Warner merger between the largest video pay-TV distributor in the U.S. (and second largest wireless carrier) and one of the premiere video programmers in the country during the entire course of DOJ’s investigation, and only when DOJ opposed this merger on November 20 did Open Markets issue a short statement in support. How is it that a Republican DOJ is more interventionist than Open Markets, if you are indeed a leading voice against concentration and “mega mergers?” DOJ’s action to block this merger seems to fly in the face of any argument that existing antitrust laws somehow preclude law enforcement agencies from taking action against so-called vertical mergers. While we still must await a final ruling, doesn’t DOJ’s action suggest that there is plenty of room for more robust antitrust enforcement under existing statutes?
- Media. Dozens of Senators have raised serious concerns about the pending acquisition by Sinclair Broadcast Group, the nation’s largest broadcast TV station owner, with Tribune Media, the second-largest broadcaster. As Sen. Blumenthal (D-CT) has put it, this merger could change the media landscape in the United States fundamentally, and not for the better. Meanwhile, the Federal Communications Commission seems to be doing everything it can to clear the way for this merger, including the evisceration of local and national broadcast ownership restrictions, leading many to ask whether antitrust enforcers at the federal and state levels will fill the void left by the FCC and strenuously enforce existing antitrust laws. Again, however, I cannot find analyses by your organization challenging this very troubling transaction. Isn’t this a classic case of a horizontal merger at both the national and local levels? Wouldn’t current antitrust law provide more than enough of a basis to challenge this transaction? If the DOJ can bring a claim to block the AT&T/Time Warner merger, why not bring a claim against Sinclair/Tribune? Where does your organization stand on any of these important questions?
Barry Lynn and the Open Markets Institute have raised the profile of antitrust law. Progressives and Democrats absolutely should rally behind vigorous enforcement of antitrust law, in which the Obama administration was exemplary. Mr. Lynn’s glaring omission of some of the most controversial mergers of our time, however, suggests that before he talks about amending the law in the future, he must address what the law can do right now to stop these extremely troubling mega-deals. We don’t have time to waste.
David Goodfriend is a Washington, D.C.-based lawyer and adjunct professor at the Georgetown University Law Center and the George Washington University School of Law. He served as Deputy Staff Secretary to President Bill Clinton and as Media Legal Advisor to FCC Commissioner Susan Ness.