Hopefully this will serve as a deterrent lesson to the U.S. Department of Justice, and the federal government more generally.<\/p>\n
Yesterday, Federal Judge Richard Leon delivered his decision<\/a> rejecting the Justice Department’s misguided lawsuit to prevent AT&T and Time Warner from merging.\u00a0 The government had no business even bringing the suit, as the merger poses no threat of consumer harm.\u00a0 To the contrary, as noted in today’s Wall Street Journal<\/a><\/em> by Michael D. Smith and Rahul Telang, it promises more choices and greater market competition for American consumers.\u00a0 Because the merger was “vertical” in nature, rather than a “horizontal” merger of direct market competitors, federal bureaucrats would only inflict harm by delaying or denying its fruition:<\/p>\n [T]he unique characteristics of digital markets have allowed a small number of internet giants – among them Amazon, Google, Netflix and Facebook – to dominate their industries and forestall entry by competitors.\u00a0 These companies have put serious money into customer connections, data analytics and back-end systems, and these investments scale very well.\u00a0 Netflix has penetrated more than half of U.S households.\u00a0 Google and Facebook control almost three-quarters of online advertising.\u00a0 Amazon does nearly half of all online retail sales.\u00a0 These are astonishing numbers.<\/p>\n Now that these tech giants have established their downstream power in the distribution business, they are beginning to amass upstream power by getting into the content-creation business…\u00a0 Given the dominance of Silicon Valley’s internet giants, it makes no sense to prevent AT&T and Time Warner from merging.\u00a0 These companies aren’t trying to join forces because they want to take control of a dying industry;\u00a0 they want to be allowed to compete in a new one.”<\/p><\/blockquote>\n The American economy has accelerated<\/a> since President Trump’s election as a consequence of his deregulatory and tax-cutting agenda, and that same logic should apply to the realm of market mergers between mutually bargaining parties.<\/p>\n