Judge Richard Leon of the US District Court for the District of Columbia has just ruled that AT&T can move forward with its $85 billion acquisition of Time Warner.
He said at a hearing that he has found, after a six-week trial, that the deal does not violate antitrust law and can proceed.
This is great news since
there is no antitrust problem.
The Justice Department can appeal the decision.
-RW
Please forgive me of my ignorance however I would love to understand why antitrust is a bad thing but when one company owns the market of a industry it kills innovation which can in my mind can kill the free market. Can someone help me understand that ?
ReplyDeleteA monopoly can only kill innovation by chargeing such a low price that it’s not worth trying to improve on or compete with.
DeleteThe state, on the other hand...
Contrary to the propaganda line Micah monopolies have been around longer than we have been alive and the king of monopolies - the US government - is complicit in supporting contrary to what the rule of law would "have" you believe.
DeleteFrom an economic perspective, in the free market there is no real "monopoly," since competitors are free to enter at any time and compete, if they perceive that the incumbent is charging too much, innovating too little, or otherwise providing a poor service for consumers. In addition, consumers are free to withhold their purchases if they don't like what the incumbent is doing. Thus interference by the state is unnecessary. (The only sustainable monopoly is one backed by the state's force, such as through exclusive permits, patents, etc.)
DeleteFrom a moral perspective, no man has the (justifiable) right to use force to require another man to price his goods in a particular way, sell more goods than he wants, break up his business, or require him to market his product in a particular way. Thus interference by the state is illegitimate.
Historically, the complainants in anti-trust have not been consumers, but the more inefficient competitors, who want to use the state's force to handicap the more efficient competitors. The merger approval process allows the state to demand that companies do things to get approval which the state doesn't otherwise have explicit power to demand.
I dont know but when it seems that there is an artificial reduction of competing choices it shoots holes in the purity of your economic perspective. Thats okay though since most wont care and accept the sole option offered.
DeletePerhaps thats my underlying point. Its all moot and no one really gives a shit. They should though because many lack the imagination or desire to envision where down the road this corporate oligarchy will lead.
But by all means exert that great wide choice you have.
To say that there is an "artificial reduction of competing choices" overlooks the fact that no firm is obliged to be in business to serve customers. If there are two competitors, good for the consumers. But if Time Warner shut down, either voluntarily or through bankruptcy, there would be the same impact on "choice" for consumers as this merger. What is the DoJ going to do in that instance: force the Time Warner management to open up their shop again?
DeleteOh so if Comcast and att raise there price it makes room for someone to undercut them ?
ReplyDeleteRe: Micah,
DeleteYez, it does. It has happened before, MANY times. The only way a company can get away with raising prices without competition is if the State provides the company with special concessions and protections.
Yes, unless the state prohibits new competitors from entering the market (which often happens through the state’s granting of exclusive operating permits in particular territories).
ReplyDelete