Read the passage and answer the following questions:
First, AOL and Time Warner announced their intention to combine. Then came Time Warner/ EMI and Tribune / Times Mirror. Even more significant, however, has been the speculation that these mergers have caused. If these transactions are consummated, A large number of additional media mergers are expected. There is even the possibility of A nightmare scenario- A wave of media mergers so large that within A decade most of our information will be supplied by perhaps six of these huge conglomerates and A fringe of much smaller firms.
It’s time to ask two critical questions. Is this kind of media oligopoly what we, as A society, want? And if not, can the antitrust laws effectively prevent the threatened merger wave? The answer t the first question is clear. We do not want A media oligopoly. The answer to the second question, however, is far less certain. We should distrust A media oligopoly because it would give undue control to A small number of individuals. This need not manifest itself in A price rise for the daily newspaper or AOL’s monthly fee. Rather, it could consist of A change in editorial viewpoints A shift n the relative prominence of links to certain websites or A decision not to cover certain topics, because they are not “newsworthy”. These problems could exist without any improper intent on the part of the media barons. Even if they try to be fair and objective, they will necessarily bring their own worldview to the job. And in time, some of these conglomerates may be controlled by people who are to fair or objective.
At first, it might appear that the antitrust laws are of little help in grappling with the issues presented by large media mergers. The anti-merger laws are commonly understood as protecting price competition and A relatively small number of firms- to greatly oversimplify let’s say at most half A dozen – are normally thought to be enough to keep A market price –competitive. In industry after industry, firms merge until there is only A handful left, and the antitrust enforcers are normally unable to do anything to prevent this. (In former years mergers were governed by an “incipiency “standard that prevented mergers and merger wave’s well before they would have led to very large or likely anticompetitive problems.) Even if A handful of firms are enough to ensure effective competition in most industries, would six conglomerate media firms be sufficient for the diversity of viewpoints necessary to democracy? Would we be reassured if they could somehow guarantee that they would sell their magazines and internet advertisements at competitive prices?
I am hopeful that the antitrust laws if correctly and vigorously interpreted are adaptable enough to meet this challenge. This is because antitrust is not exclusively about the price. It is essentially about choice- about giving consumers A competitive range of options in the marketplace so that they can make their own, effective selection from the market’s offerings. Consumers should be able to make their choice along any dimension important to them- including price, variety and editorial viewpoint.
Competition in terms of editorial viewpoint or gate-keeping can be guaranteed only by ensuring that A media market contains A significantly larger number of firms that are required for price competition in other, more conventional markets .it is unclear, however, whether this interpretation of the anti-trust laws will be applied by the enforcement agencies and the courts.
What is needed therefore is a much more careful look at the challenges that will be raised by future media mergers.