Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: AAI urges FCC to reject Comcast-TWC combination, (Aug 25, 2014)
Organizations Mentioned:American Antitrust Institute | Arnold & Porter, LLP | Comcast Corp. | Comcast Corporation | General Electric | Time Warner Cable, Inc.
By Jeffrey May, J.D.
Comcast Corp.’s proposed $45 billion acquisition of Time Warner Cable, Inc. (TWC) is “highly likely to result in myriad competitive harm and adversely affect consumers,” according to the American Antitrust Institute (AAI). In comments submitted today in response to the applications of Comcast and TWC to transfer of licenses and authorizations, AAI urged the FCC to reject the combination because “the applicants have not met their burden of demonstrating that the proposed merger is in the public interest.”
AAI suggests that the deal must be considered in the context of the trend toward mega-deals in the industry. The group points to two fundamental ways that the deal poses a threat to the public interest:
Comcast-TWC will possess greater ability and/or incentive to potentially exclude rivals, including TWC’s downstream video distribution competitors and a variety of upstream competitors, such as content programmers, edge providers, and middle market participants, by virtue of its “gatekeeper” role as a dominant provider of broadband Internet service; and
Comcast-TWC will have a greater ability and incentive to potentially exercise buyer power against upstream rivals in the content, edge, and middle markets.
According to AAI, it is unlikely that the parties' claimed efficiencies clear the Commission’s hurdles for a public interest finding and proposed remedies will not resolve the competition concerns.
Comcast and TWC announced their proposed combination in February. The firms are considered the nation's two largest cable operators; however, they contend that they do not compete in any market.
The Department of Justice Antitrust Division is also reviewing the transaction. William Baer, Assistant Attorney General in charge of the Antitrust Division, is recused from the investigation however. While at Arnold & Porter LLP, Baer worked with General Electric Co. during the Justice Department’s 2011 antitrust review of GE’s NBCUniversal joint venture with Comcast.
Companies: American Antitrust Institute; Comcast Corp.; Time Warner Cable, Inc.
News: AcquisitionsMergers Antitrust