Originally published in US News & World Report (coauthored with Adam Candeub)
The Justice Department’s lawsuit against AT&T and Time Warner appears to fulfill President Donald Trump’s year old promise to block the merger. In October 2016, his campaign vowed to “break up the new media conglomerate oligopolies that have gained enormous control over our information” and that the “oligopolistic realignment of the American media along ideological and corporate lines is destroying an American democracy that depends on a free flow of information and freedom of thought.”
While candidate Trump raised important concerns about monopolies in today’s marketplace of ideas, dominant internet platforms like Google, Facebook, Amazon and Twitter pose a far greater threat to the free flow of information than any telecom or media company. As AT&T’s response noted, the merged company will be poised to compete against these tech giants. Ironically, blocking the merger will further consolidate these tech oligopolies’ market power.
In 1972, Arthur Schlesinger Jr. observed, “power in America today is control of the means of communication.” While his words still ring true today, those means have changed. When Schlesinger made those remarks, three commercial networks and PBS, which used government-owned spectrum, dominated television. Now thousands of stations, distributed over satellite, cable and increasingly through streaming internet video vie for our attention.
Yet, despite changing times, the fear of consolidated media and communications industries persists. Critics of media concentration note that that only six companiescontrol the majority of major channels. However, the AT&T-Time Warner merger does not limit media voices. Time Warner produces original content. AT&T provides media distribution as well as phone and internet service. The deal proposes a vertical merger that integrates these two companies. The Justice Department’s complaint does not even claim that the deal will not diminish media viewpoint diversity or output.
Instead, the lawsuit warns that a merged AT&T would “use its control of Time Warner’s popular programming as a weapon to harm competition.” However, the Justice Department acknowledges that Time Warner competes with not only rival television stations, but with original content found on Amazon Prime, Apple and Netflix. The complaint even warns that the merged company would prevent Amazon from competing, as if it needs help from the government. Regardless, any fear that AT&T/Time Warner could act unfairly towards competitors could be assayed through “conduct remedies” – such as applying neutrality principles, as Comcast did when it purchased NBC.
Rather than fight yesterday’s battles, antitrust authorities should focus their attention on the monopolies that already use their dominance to reduce viewpoint diversity and stifle competition: the tech titans Google, Facebook and Amazon.
Big tech platforms have used their unique ability to access our personal information to advantage themselves in other markets. Most notably, Google and Facebook use the data they glean from our searches and social media accounts to dominate the online advertisement market through targeted ads, all at the expense of traditional media outlets. The merged AT&T Time Warner hopes to create similarly targeted ads for television, which could compete against the digital ad duopoly.
Additionally, these companies now compete against content creators. Amazon, which controls 83 percent of U.S. e-book sales, allows anyone to self-publish e-books for Kindle. But, it will not publish “offensive content,” which it vaguely defines as “probably about what you would expect.” Facebook’s Instant Articles integrates entire news stories onto its platform, competing against news websites. In addition to reducing ad revenue for news outlets, Instant Articles has even stricter censorship policies than other Facebook content. By restricting revenue while promoting trending click bait stories, Facebook’s dominance leads to low-cost and low quality journalism.The Justice Department’s lawsuit against the merger faces many obstacles. Current legal precedent typically approves vertical mergers with adequate conduct remedies. Exacerbating the situation, Trump’s comments about the proposed merger on the campaign trail and his feud with CNN, fairly or not, fuels allegations of political interference.
Fighting the merger is an enormous waste of political capital and legal resources, which would be better spent on the already Herculean task of taking on the big tech monopolies. Trump’s opposition to a few new oligopolies telling Americans “what to think and what to do” reflect legitimate concerns about media and internet conglomeration. However, fighting the last war by trying to block this merger only makes matters worse.