Antitrust attorneys do everything that a lawyer can do: They litigate in both courts and agencies; they counsel clients; and they participate in mergers & acquisitions. If you are a young lawyer or law student that can’t decide what type of legal activity you like best, try antitrust and competition law—you can do it all.
In the mergers & acquisitions category, antitrust’s most recent obsession is the deal between Comcast Corp. and Time Warner Cable., Inc.
Competition Policy International (CPI) was kind enough to ask me to write a few words expressing my thoughts, and you can read them here. You can view the other Comcast-TWC articles from the CPI Antitrust Chronicle here.
I won’t go into a lot of detail because you can read the actual article (which is less than five pages), but I thought I’d provide a little introduction into my thinking.
Usually in these circumstances, you will see commentary on one side stating that, of course, the merger should be approved, maybe even “as is.” On the other side, you will read analyses that the world will fall apart if the merger is not blocked forever.
I haven’t read any internal documents, reviewed any expert reports, or studied the markets in detail, so I decided to decline any widespread pronouncements giving the merger a thumbs-up or thumbs-down.
I did, however, urge an important caution as we head down a predictable course. This is the sort of transaction that is controversial and is likely to invite behavioral or conduct remedies. These are remedies that are, at first glance, less drastic than a pure challenge to block the deal or a divestiture of business units or assets (which are called structural remedies).
A conduct remedy attaches strings to a merger. The company goes forward as one unit, but has certain limits in what they can do. They must resist rational competitive behavior, no matter how their markets or competitors change, and instead follow the course set out by the government at the time of approval.
The problem is that these remedies are often the easy political solution because the antitrust agency (and the politicians pressuring the agency) can say that the merger was approved—thereby satisfying one side of the controversy—but we eliminated future anticompetitive conduct through certain conduct requirements (thereby satisfying the other side).
But merger remedies are not utopia and conduct remedies have a downside. Not only are they hard to implement and get right, but they disturb future market developments in ways that we are unlikely to predict or quantify. They require a major competitor in important markets to refrain from competing in particular ways. This must affect resource allocation and the natural development of the market.
But like many harms from government action, the victims are dispersed and nobody can point to companies that won’t develop or inventions that won’t materialize because of the action. So the easy political remedy usually wins out. It is unfortunate.
I seek to represent the unnamed companies that won’t develop, and the unnamed inventors that won’t succeed, and the inevitable but anonymous individuals and companies that will do worse because the government took the easy route and decided to use its dull hands to manipulate markets by involving itself in future competitive decisions.
Vote no on conduct remedies.