In March of this year, the United States Department of Justice’s (“DOJ”) Antitrust Division and the Federal Trade Commission (“FTC”) jointly announced a series of “listening forums” that would help gather feedback from the world real participants in key industry sectors. segments on possible reforms to antitrust regulations relating to mergers and acquisitions.1 Co-led by DOJ Assistant Deputy Attorney General (“AAG”) Jonathan Kanter and FTC Chairwoman Lina Khan, the third of four announced forums, focused on media and entertainment, was held on April 27 2022.2 In addition to AAG Kanter and Chairman Khan, the program featured seven panelists who provided insights from next-gen artists, music, box office, journalism and broadcast technology.3
Chair Khan began her remarks by acknowledging the massive shift in the industry for content providers and how consumers are now accessing that content. Khan noted that in 2021, communications and media mergers were worth nearly $200 billion, and she noted vertical integration under some of those mergers. Khan also expressed concerns about “bottleneck” situations where a handful of companies control the flow of content upstream and downstream, negatively impacting competition, content diversity and pricing. . She said the FTC is working to improve the agency’s analytical efforts to measure harm, particularly with respect to these new communications and media platforms and technologies. According to Khan, newspapers, media and entertainment are the “cornerstone” of democracy, and therefore it is of the utmost importance to ensure that competition is not affected by the continued consolidation of the industry.
Panelists expressed a wide range of concerns in the industry, such as the wave of consolidation in the industry and its negative impact on the diversity of visual and musical content, salaries and alternative ticketing options. Panelists also urged agencies to reject behavioral remedies in exchange for merger clearances, greater scrutiny of hedge fund acquisitions of newspapers, and industry pressure to limit platform technology options. alternative broadcast distribution forms.
AAG Kanter provided closing notes acknowledging that consolidation in the media and entertainment industry is diminishing programming and leading to “silence of voices”. Kanter also noted labor market issues and the need for antitrust agencies to focus on these issues when considering revising the horizontal merger guidelines framework.
The forum ended with a few public comments, most of which echoed similar concerns raised by panelists, with additional complaints regarding private equity acquisitions in the industry and vertical integration in the the music.
With AAG Kanter recently stating that he is “here to declare that the era of lax enforcement is over and the new era of vigorous and effective antitrust enforcement has begun”, it is important, now more than ever, for media and entertainment companies. to partner with an antitrust attorney to strategically analyze potential transactions in the industry, regardless of transaction size, in light of such review. Both the FTC and the DOJ are ready to test their enforcement mandate from the Biden administration in this sector. And the Polsinelli Antitrust team is ready to help customers.
The latest technology-themed DOJ and FTC Listening Forum to be held on May 12, 2022. Click here to download the alert.
1 “Forums to Focus on Markets Commonly Affected by Mergers: Food and Agriculture, Healthcare, Media and Entertainment, and Technology,” March 17, 2022, available at: https://www.ftc.gov/news-events/news/press-releases/2022/03/ftc-justice-department-launch-listening-forums-firsthand-effects-mergers-acquisitions
2 See “Antitrust Enforcers’ First ‘Listening Forum’ On Merger Reform Highlights Ongoing Concerns in the Food and Agriculture Industry”, May 9, 2022, and “Antitrust Enforcers’ Second ‘Listening Forum’ On Merger Reform Highlights Ongoing Concerns in the Healthcare Industry”, available at: https://www.polsinelli.com/intelligence/antitrust-forum-highlights-concerns-in-food-and-ag and https://www.polsinelli.com/intelligence/antitrust-forum-highlights-healthcare-industry
3 Bio of the panelists available on: https://www.ftc.gov/system/files/ftc_gov/pdf/Speaker%20Bios%20-%20April%2027%2C%202022.pdf
© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume XII, Number 143