A victory for American consumers
How the Disney-Fox antitrust settlement protects competition
As the assistant attorney general in charge of the Antitrust Division of the U.S. Department of Justice, I am compelled to respond to The New York Times editorial board’s baseless contention that it is “harder and harder to believe” that antitrust enforcement decisions are based on facts and law rather than politics. This view relies on a fundamental misunderstanding of merger review and mischaracterizes the recent AT&T-Time Warner and Disney-Fox enforcement actions.
On June 27, the Division announced that after six months of review, The Walt Disney Company agreed to divest 22 Regional Sports Networks in order to acquire certain assets from Twenty-First Century Fox, Inc. If a federal court approves it, the settlement will require divestitures in markets where Disney and Fox compete for cable and satellite distribution, preserving cable sports programming competition, as the antitrust laws require.
This is a victory for American consumers and should be heralded as an example of merger parties working effectively with Division investigators to resolve antitrust concerns. Instead, The New York Times laments that the Division went “easy” on Disney-Fox, apparently because the editorial board believes the investigation should have taken longer than six months, or because it should have proceeded to a trial, like the AT&T-Time Warner merger.
The Times suggests that because the Division “spent nearly two years” investigating and litigating the AT&T-Time Warner deal, and just six months reviewing and ultimately reaching a proposed settlement with Disney, the motivations underlying both enforcement decisions should be called into question. The Times’ comparison rests on a false premise.
First, the Times’ description of the timing is inaccurate. AT&T announced its acquisition of Time Warner in October 2016. The Division sued to block the merger in November 2017, which was only eight months after the parties complied with the Division’s formal requests for information relevant to the transaction. Moreover, AT&T knew within six months of producing documents that the Division found parts of the proposed transaction anti-competitive.
While The Times suggests that deals of this size usually require a year for antitrust review, it ignores that each merger poses unique facts requiring unique market analysis. The pace of any review is largely in the hands of the merging parties, who control the timing of their Hart-ScottRodino filings, as well as the pace and timing of compliance with the Division’s information requests. Parties can accelerate the review by pointing the Division to relevant information early in the investigation, promptly scheduling interviews, and remaining open to timely divestitures that resolve antitrust concerns.
No objective observer can describe the Antitrust Division’s investigation and suit 13 months after announcement of the AT&T-Time Warner deal — the largest telecommunications merger in history — as outside the norm. If the Division had simply approved the AT&T-Time Warner merger, however, the editorial board no doubt would have criticized the Division as failing to enforce the nation’s antitrust laws. If the Division reached a settlement, the same editorial board likely would have called for an investigation of the Division’s motives on similarly frivolous grounds.
The bottom line is this: The Division discharges its law enforcement duties faithfully and without regard to politics or the political affiliations of the parties. American consumers and the business world win when the Division and merging parties ethically and expeditiously reach a settlement that protects competition. They also win when the Division takes the necessary time to review problematic mergers and exhaust all efforts to settle a case before suing to block a transaction.
In AT&T-Time Warner, litigation was not the Division’s first choice. The Division made multiple settlement offers involving divestitures, but the parties offered and would accept only socalled “behavioral” remedies involving promises to refrain from anticompetitive conduct.
In Disney-Fox, by contrast, the parties’ willingness to work cooperatively with the Division, offering up the very types of divestitures which the Division could reasonably expect to achieve through litigation, resulted in an efficient conclusion after six months of review. Such successful results should be praised rather than politicized by The Times editorial board. Such politicization does a serious disservice to the American public.