The proposed joint venture between Comcast Corporation and NBC Universal is a significant transaction in a significant market. The transaction will create a large media and distribution company, including the programming assets of both NBC, a leading national programmer, and Comcast, which owns several cable networks and some regional sports networks, and the distribution assets of NBC (namely, its owned-and-operated broadcast television stations). This new company will be majority-owned by Comcast, which in its own right is the nation�s largest distributor of multi-channel video programming, and Comcast could be in the position, within the next few years, to own 100% of the new joint venture. The size of the transaction is made more important by the markets in which the companies operate: the companies are more than just producers and distributors of entertainment and sports programming, which are of course important in their own rights, the companies also produce and distribute news and political programming. The mass media has long been considered a market important enough not only to draw scrutiny from antitrust authorities but also to justify the attention of a specialized regulator, using sector-specific regulation designed to achieve specific outcomes.
Antitrust and Competition
Economic analysis of markets is a core part of what we do. Our research has focused on mergers, vertical integration, and global competition policy. Our experts have deep experience in competition policy.
NBC/Comcast Should be Judged only on Antitrust Concerns
Antitrust analysis of the proposed merger between Comcast and NBC Universal should focus only on its effect on competition in relevant markets and resulting harm to consumers, states James Speta in “Screening and Simplifying the Competition Arguments in the NBC/Comcast Transaction” released today by the Technology Policy Institute.
Google-AdMob: A Bad Precedent
TPI President Thomas Lenard published a piece on Forbes.com discussing the expected involvement of federal regulators in Google’s acquisition of AdMob. In the piece, Lenard warns of possible shortcomings of traditional merger analysis if applied to the fast-moving mobile advertising market and urges regulators to carefully consider the long-term effects of antitrust action on innovation in this space. The entire piece can be found at Forbes.com.
October 16th Event: Antitrust and the Dynamics of Competition in High-Tech Industries
The way the government applies antitrust laws can significantly affect innovation and investment, for good or ill. IT firms have characteristics that make antitrust enforcement more complex, including significant amounts of intangible capital, supply- and demand-side economies of scale, and rapidly changing markets characterized by continuous innovation. The new administration has signaled a more proactive approach to antitrust enforcement, particularly with respect to high-tech and Internet-based markets. This Congressional Seminar will examine the proper application of antitrust policy to the IT sector and the direction the new administration is taking.
The End or the Means? The Pursuit of Competition in Regulated Telecommunications Markets
Economic analysis takes as its defining performance benchmark the pursuit of increases in welfare (efficiency). Competition is merely one of a variety of means of achieving the efficiency end, especially in industries where the underlying economic circumstances predispose them towards greatest efficiency when competition (in the form of many market participants) is restricted. Typically, regulatory intervention in these industries is justified by the imperative to increase efficiency. Competition law and industry-specific regulation provide two competing means of intervention whereby the pursuit of efficiency can be enhanced. The challenge is in determining how to allocate responsibility for governance of industry interaction between these two institutional forms. Whilst competition law can govern interaction in most industries, where the underlying economic conditions are sufficiently different, industry-specific regulation offers advantages. However, its weakness is the risk of capture, leading to the subjugation of the efficiency end to the pursuit of other objectives (e.g. competition – the means – as an end in itself). But if the regulatory institution could be bound in some way to pursue an efficiency objective, could the risk of capture be averted?
An Examination of the Google-DoubleClick Merger and the Online Advertising Industry: What Are the Risks For Competition and Privacy. Testimony before the Subcommittee on Antitrust, Competition Policy and Consumer Rights Committee on the Judiciary
Lenard, Thomas. “An Examination of the Google-DoubleClick Merger and the Online Advertising Industry: What Are the Risks For Competition and Privacy.” Testimony before the Subcommittee on Antitrust, Competition Policy and Consumer Rights Committee on the Judiciary, U.S. Senate, September 27, 2007.