In today’s FT, the paper’s US Editor trumpets the Circuit Court’s approval of the AT&T-Time-Warner merger as evidence of the resilience of the judicial system in the face of Trump’s aggression. (He has regularly spouted his opposition to the deal.) But Tim Wu sees it more of a confirmation of how far antitrust law and judicial interpretation has drifted from the original determination of Congress to prevent corporate agglomeration.
When Congress enacted the Anti-Merger Act of 1950, the law by which American courts still adjudge corporate mergers, it did so with the repeatedly stated goal of fighting excessive economic concentration. The “dominant” concern, as the Supreme Court wrote in a 1962 merger case that analyzed the law, was about “a rising tide of economic concentration in the American economy.” At the time, the court explained, a wave of corporate consolidation posed the threat of an “accelerated concentration of economic power” and also a “threat to other values,” like the independence of smaller businesses and local control of industry. In particular Congress had said it intended the new law to stop a wave of mergers in its “incipiency.”
That’s why, for the 1950 Congress, the law would surely have allowed the Justice Department to block the recent AT&T-Time Warner merger. The merger, which a federal judge approved on Tuesday, combines AT&T, the nation’s largest wireless provider and a major seller of pay TV, with Time Warner, one of the most powerful media companies, in an $85 billion deal. No one can deny that the new AT&T will have more economic power and also more political power than before, even as it now carries more debt ($181 billion) than many industrialized nations. The ruling, by Judge Richard J. Leon of United States District Court in Washington, implicitly encourages the rest of the industry to integrate as well, and AT&T’s comrades have taken the hint: Comcast has already announced its intent to acquire much of 20th Century Fox, while other deals are said to be imminent.
Judge Leon’s decision shows just how far the law has wandered from congressional intent. The law has become a license for near-uncontrolled consolidation and concentration in almost every sector of economy. Whether involving airlines, hospitals, the pharmaceutical industry, cable television or the major tech platforms, mergers leading to oligopolies or monopolies have become commonplace…