Nation Topics - Mergers and Antitrust
News and Features
As the online behemoth strengthens its monopoly over the marketplace, publishers, like bookstores, are in a fight for survival.
Helping the big get bigger, the strong get stronger.
Americans interested in economic justice used to consider antitrust litigation a top priority. Perhaps soon we will think along these lines again.
The Supreme Court once championed antitrust laws as valued tools to limit corporate power and to promote the autonomy, diversity and economic rights of people and firms without power. Not anymore.
This spring the topic of antitrust returned to the headlines after a long absence as the government pursued and won (for the time being) its case against Microsoft and, in a more muted way, as Ti
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When legendary media critic A.J. Liebling issued that warning some
decades ago about the corrosive effect of media monopolies on the First
Amendment, media ownership was a great deal more varied than it is today.
Even then, it was far more concentrated in a few hands than when the
Bill of Rights was written, when "the press" was a low-capital venture,
and newspapers were easily launched by those who had something to say.
The founding fathers hardly anticipated today's media market, in which
journalism is a vehicle for mega-corporate profits, and the diversity of
opinion implied in the First Amendment is threatened less by a king or the
state and far more by the motives of media barons.
Nowadays, media mega-mergers are the rage, and the Bush Administration
is determined to remove legal barriers to media conglomeration that long
have prevented a few giant corporations from controlling all of print and
broadcast journalism. But can we count on the very news organizations
whose owners are zealously pursuing profit from those mergers to also
objectively cover the implications of media concentration for a free
The initial signs aren't promising. When America Online purchased Time
Warner in the biggest media merger in US history, there was
considerable analysis of the deal's business aspects but meager attention
to implications for a representative democracy of having a significant
portion of its media controlled by one corporation.
Previously, one could assume that Time magazine, AOL and CNN, as well
as other parts of the new conglomerate, at least reflected the voices of
different owners, but that's no longer the case. Also, with that merger,
AOL went from being an outsider company demanding open access to cable to
being the second-largest cable operator. Suddenly it muted its open
access demand, leaving the perception that the news outlets now assembled
under the AOL banner might also have had a change of heart as to what's
important in the cable controversy.
Most recently, the new Bush FCC appointees relaxed a long-standing
"dual network rule" barring one television network from buying another.
The result is that Viacom, which owns CBS, will have a large stake in the
UPN network. Will other broadcasters anticipating similar deals permit
their news organizations to voice dissenting opinions, or launch
investigations of the FCC's abandonment of its consumer watchdog role?
Meanwhile, Rupert Murdoch has made clear his intention to purchase
DirecTV from General Motors. If he succeeds, he'll combine the largest
US satellite broadcaster with his existing satellite network, which is
pervasive in much of the rest of the world. Will journalists laboring in
his vast empire dare raise troubling questions about the danger of one
man holding such overwhelming power in the world communications market?
Further, Bush's new FCC chairman, Michael Powell, promises to
eliminate the 1975 prohibition against cross-ownership--a company owning
a TV station and newspaper in the same market. That might prove immensely
profitable to the Tribune Co., which, in purchasing the Times Mirror Co.
last year, acquired newspapers in three markets where Tribune already
owned television stations. But is cross-ownership healthy for independent
journalism in those markets, which include New York and Los Angeles? Will
the news outlets that are subsidiaries in the deal fully examine the
journalistic implications of media concentration? Or will they only
report on the wonders of what the owners celebrate as "convergence" or
The answer suggested by the last election is that media have
difficulty covering themselves fully when the owners' financial interests
are seriously in play. How else can one explain the scant attention paid
to the difference between Al Gore--who opposed cross-ownership--and
George W. Bush on this issue?
Also ignored in the coverage was the stake that media moguls had in
the Democrats not gaining control of Congress. Had that happened, John
Dingell (D-Mich.) would be chairing the House Commerce Committee, which
oversees the work of the FCC. Dingell was on record as opposing the
Tribune purchase of Times Mirror because such mergers lead to a "huge
concentration of power in a small group of hands."
That's why Dingell and others believe that government regulation to
preserve a diverse media market is essential. The rules concerning media
ownership were not carelessly drawn up over the preceding decades to
inconvenience the media industry. Rather, they were designed to save the
media business from its worst instincts.
Regulation is a reminder that there is a public interest in the news
media as in no other industry because corporate concentration threatens
the competition vital to an unfettered press. The free press belongs to
us all and not just to the few who own one.
Despite all the palaver, the denouement came quickly.
Only a few days before the announcement of the AOL-Time Warner merger, Time Warner chief executive Gerald Levin took part in a CNN discussion on the future of the media.
Judge Thomas Penfield Jackson's factual findings in United States v. Microsoft, released November 5, spell the doom of Microsoft as we have known it.
An abbreviated version of this article appeared in the October 4, 1999 issue.