by Timothy Lee
Mon, Nov 12th 2007 12:33pm
Declan McCullagh has a great post pointing out Congressional Republicans' recent flip-flop on antitrust scrutiny of big corporate mergers. During the telecom consolidations of the last few years, powerful Republicans like Joe Barton and Fred Upton pressed regulatory agencies to approve the mergers quickly with minimal scrutiny. But now that Google wants to buy DoubleClick, House Republicans have gotten the antitrust religion. A letter signed by 12 Republican Congressmen, including former House Speaker Denny Hastert, demands that the House commence hearings on the Google-DoubleClick proposal because "the privacy implications of such a merger are enormous." As Declan astutely observers, the telecom companies that Republicans waved through last year gave generously to Republican legislators, whereas Google's board and senior executives have tended to give to Democrats. It seems like there might be a connection there.
As troubling as this behavior is, we shouldn't be too surprised. Antitrust law was supposed to be about preventing any one company from accumulating excessive market power, but regulators have long been in the habit of considering factors far afield from the proposed company's market share. Earlier this year, 70 Congressmen urged the FCC to block the XM-Sirius merger on the laughable theory that the merged company wouldn't have any competition, an argument that was being pushed primarily by XM and Sirius's many competitors in the terrestrial radio business. And last fall the two Democratic members of the FCC used the AT&T-Bell South merger as a pretext to force AT&T to accept network neutrality rules for 30 months, despite the fact that antitrust law doesn't say anything about network neutrality.
Even if you like network neutrality rules or are worried about the privacy implications of the DoubleClick deal, you should be even more troubled at the way this ad hoc process undermines the rule of law. It's Congress's job to pass new regulations on subjects like network neutrality and privacy. When Congress passes legislation, it applies equally to everyone in the industry, limiting favoritism. But the way the antitrust process currently works gives politicians and bureaucrats the opportunity to single out individual companies for special treatment. If a company hasn't given enough campaign contributions to the right members of Congress (as XM and Sirius hadn't), its merger request is likely to be weighed down with a raft of burdensome conditions, or denied altogether on spurious grounds. Behavior like we've seen from the House Republicans will be commonplace as long as regulators have virtually unchecked authority to approve or reject mergers.
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