(PRWEB) February 14, 2014
Approval for the massive merger between Comcast and Time Warner could take more than a year, in part for scrutiny of whether the merger will create or facilitate market power in the new company, according to an antitrust expert at The John Marshall Law School in Chicago.
According to a Feb. 13 Associated Press report, the nation’s two largest cable providers, Comcast and Time Warner, announced a merger worth $45 billion. Jeffery Cross said the merger will be closely analyzed on its ability or probability to raise customers’ prices without losing so much market share that the price increase is unprofitable.
Cross, who teaches antitrust and business franchise law at John Marshall, said: “The merger guidelines issued by the Department of Justice and Federal Trade Commission indicate that the overarching principle of merger review is whether the merger will create or facilitate the exercise of market power.
“In this regard, Comcast and Time Warner may have good reason to be bullish about regulatory approval. People watch TV on a whole host of devices such as tablets and smartphones. Apple is reported to be poised to sell a TV equivalent of the iPad. The substitutes that might prevent the exercise of market power could come from these alternative devices. We saw the FTC recently approve a merger between Office Depot and OfficeMax in part because of substitutes to the brick-and-mortar stores in terms of purchasing office supplies.”
Cross cast doubt that the deal will get agency approval in the nine to 12 months reportedly predicted by Comcast Executive Vice President David Cohen.
“The FCC will have a key role in the review of this deal,” Cross noted. “The DOJ and the FTC will undoubtedly weigh in, seeking substantial economic data from the parties to perform extensive econometric analyses in terms of whether the deal will create or facilitate the exercise of market power. The agencies will also be seeking documents from the parties to determine how they view the price competition.”
Jeffery Cross is a partner at Freeborn & Peters in Chicago. For more information about him, go to http://www.freeborn.com
To contact Jeffery Cross for an interview, please contact Christine Kraly at firstname.lastname@example.org