Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Wednesday, April 11, 2007

Antitrust and Media Diversity

Posted by D. Daniel Sokol

David Balto reports on a recent decision in California.  Reilly v. Media News challenges a series of newspaper mergers in the Bay Area.  Mr. Reilly, a consumer, argues the mergers are anticompetitive and he argues the anticompetitive effects are not just a matter of prices but the importance on diversity of ownership and diversity of media views.  Judge Illston decided Mr Reilly had standing.  She relied on Judge Walker's decision in an earlier merger challenge brought by Mr. Reilly "Chief Judge Walker [in Reilly 1]  simply noted that the Newspaper  reservation Act reflects a congressional concern with "encouragement of  ultiple sources of newspaper news, features and opinion," and "the Sherman Act and Clayton Act should be read bearing in mind [these] legislative purposes.Id. at 1195. There is no reason to think that Congress was only concerned with newspaper diversity in situations where the NPA is involved.

"This Court agrees with the analysis of standing made in Reilly I. The NPA evidences that Congress values the existence of separate sources of newspaper content in a community, and that loss of separate sources injures consumers. The existence of the NPA thus strongly suggests that loss of diversity of content is a "threatened loss or damage `of the type the antitrust laws were designed to prevent and that flows from that which makes defendants' acts unlawful. "' Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S.104,113 (1986). This conclusion is consistent with the Supreme Court's broad interpretation of the Clayton Act, which "does not confine its protection to consumers, or to purchasers, or to competitors, or to sellers.... The Act is comprehensive in its terms and coverage, protecting all who are made victims of the forbidden practices by whomever they may be perpetrated." Blue Shield v Mcready" and "A refusal to compete with respect to the package of services offered to customers, no less than a refusal to compete with respect to the price term of an agreement, impairs the  ability of the market to advance social welfare by ensuring the provision of desired goods and services to consumers at a price approximating the marginal cost of providing them."  FTC v. Indiana Federation of Dentists, 476 U. S. 447, 459 (1986); see also Glen Holly, 352 F.3d at 377 ("Antitrust law addresses distribution restraints in order to protect consumers from the higher prices or diminished choices that can sometimes result from limiting intrabrand competition.") (citation omitted).

Download reilly.stngdecision.pdf

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