Press Release

Public Knowledge, American Antitrust Institute Urge Justice Department To Remain Vigilant in Media Merger Reviews

September 2, 2021

Today, Public Knowledge and the American Antitrust Institute sent a letter urging the Justice Department to carefully scrutinize the video marketplace and remain vigilant when considering mergers like WarnerMedia/Discovery. The groups analyze the changing competitive landscapes of both content and distribution markets, sharing observations with direct implications for merger reviews. The letter addresses competition challenges in the video streaming markets, from control over key intellectual property to the presence of platform gatekeepers, and outlines the lessons learned from previous mergers such as AT&T/Time Warner, particularly that promised consumer benefits often fail to materialize.

The following is an excerpt from the letter:

“[We] have long advocated for strong antitrust enforcement and policies designed to promote competition and protect consumers and workers in the media and entertainment (“content”) and content distribution markets. [We] write to the U.S. Department of Justice to provide analysis of the changing competitive landscapes of markets for content and distribution. These observations have direct implications for the review of current and future mergers, most immediately the proposed merger of leading content companies WarnerMedia and Discovery. 

“This letter provides some context for major structural and technological transitions in the video marketplace and moves on to address two major issues: (1) competition challenges in the video streaming markets and their implications for antitrust enforcement; and (2) lessons learned from claims that previous content and distribution mergers would generate significant short-term and long-term efficiencies (i.e., benefits), to the benefit of consumers.

“[This] analysis of evolving competition challenges in the video streaming markets, and the cautionary tale of how enforcers assess claimed efficiencies in those markets, should create clear priorities for antitrust enforcement in changing markets where market power is evident. The transitory moment in the move from traditional MVPDs (multichannel video programming distributors) to video streaming represents an opportunity to ensure that consumers are the beneficiaries of innovation, diversity, and choice in critical media, entertainment, and news. The failings of the MVPD markets were not an inevitability, but rather the result of underenforcement and under-regulation. Against this backdrop, it is particularly concerning that claims of consumer benefits –both in terms of cost savings passed through to them, and higher quality and innovation — are often fleeting in the content and distribution space.

“[T]he lessons learned about efficiencies from AT&T-Time Warner have serious implications for how enforcers assess merger proposals such as WarnerMedia-Discovery and other mergers involving content and distribution. Moreover, given the broader competition challenges that reside in those markets, and the lessons learned from a failure to ensure competition in the traditional MVPD markets, enforcers should be particularly vigilant.”

You may view the letter here.