Antitrust

Antitrust Laws and Agencies

Two federal laws about a century-old dictate national antitrust policy (some states have antitrust authority within their own borders, but that rarely concerns media mergers). In 1890 the Sherman Antitrust Act, the country's first antimonopoly law, outlawed monopolies and monopolization, and said any contracts, combinations, or conspiracies in restraint of trade were illegal. Price fixing and profit pooling were also prohibited. The very short law awarded triple damages to successful claimants, and gave regulatory powers to the Justice Department which in 1903 formed its Antitrust Division headed by an assistant attorney general.

The 1914 Clayton Antitrust Act clarified the Sherman Act and expanded antitrust enforcement. The new law held that business practices as well as market domination could be the subject of antitrust enforcement. Among the practices prohibited were so-called tying arrangements (having to buy one product in order to get another) and refusal to [Page 89]deal (not selling to those who buy from competitors). This law added the new Federal Trade Commission (FTC, created just a month earlier) as a player in antitrust concerns. The FTC's Bureau of Competition focuses on monopoly and antitrust concerns.

With formation of the Federal Communications Commission (FCC) by the Communications Act of 1934, antitrust concerns again played a part. Section 313 of the act requires the FCC to deny a license to any applicant for a broadcast station who has been found guilty of monopoly practices. While the roles of the FTC and Antitrust Division are expressly stated in the antitrust laws, the FCC has no specified authority. The commission cannot legally block a merger, but it can refuse to grant license transfers, or it can place conditions on those transfers. Indeed, many have criticized the agency for using a merger review process to extract concessions from companies that may have nothing to do with the merger.

Other critics have argued that FCC merger reviews take far too long for the fast moving electronic media industry. Some criticize the FCC for leaking information about the progress of its reviews. And many have called on the agency to at least adopt rules that define and govern its antitrust merger reviews. In an attempt to clarify the overlapping agency issue—and the delays that often result—it has been suggested that for mergers in regulated industries (such as broadcasting), the relevant antitrust agency (Justice Department) should perform the competition analysis. The relevant regulatory authority (FCC) should not then redo the competition analysis of the antitrust agency. But all of this remains unresolved.

Key Supreme Court Media Cases

There have been a number of landmark Supreme Court decisions that have helped define the role of antitrust in media ownership and operation.

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