Even if a merger allowed a company to lower prices through cost reductions, they still wouldn't because they own more of the market and have less incentive to compete.
The only exception I've ever heard of is Amazon's purchase of Whole Foods, but you could argue that Amazon wasn't competing much with Whole Foods before it purchased them.
> As to its price-increase theory, the government itself conceded that the merger would cause prices to go down for millions of AT&T customers nationwide. The government’s own “bargaining model” likewise showed a price decrease for all consumers, once the correct data were employed. And the government’s own economic expert effectively repudiated its other two theories of likely harm. The government, in short, gave the Court no basis for finding that this merger is likely to reduce competition at all, much less substantially. Rather, the evidence overwhelmingly showed that this merger is likely to enhance competition substantially, because it will enable the merged company to reduce prices, offer innovative video products, and compete more effectively against the increasingly powerful, vertically integrated “FAANG” companies.
The brief was addressing the predictions of the economic model the DOJ offered in opposing the merger. Nowhere did AT&T, as Brodkin misleadingly suggests, "promise" to "lower prices" (or that no specific rate would never go up). Of course, that all makes sense. AT&T had no reason to make such promises. In blocking a merger, the burden of proof is on the DOJ. They have to show consumer harm; the merger company has no burden to show consumer benefits. Why would AT&T go out on a limb and make promises it has no reason to make?
Moreover, the brief addresses the government's arguments for blocking AT&T's merger with Time Warner, which has nothing to do with the price of DirecTV:
> The government’s central prediction of harm rests on the premise that AT&T would use Time Warner’s Turner content as a “weapon” against rival distributors by threatening to withhold it during bargaining, thereby forcing them to pay higher prices.
The subject of the briefing was prices for content distribution. Prices for DirecTV--what Brodkin points to--have nothing to do with that.
Ars is on whole still quite good, but there are some heavy biases on the part of some of their writers, and I don't think Ars' editorial staff keeps them in check. I did actually subscribe to Ars' $25 a year plan that gives you full text RSS, but I almost didn't because of Jon Brodkin's crud alone.
This is a great opportunity to educate our less-technically-minded civilians on the pitfalls of large, unaccountable corporations, and the benefits of anti-trust enforcement... It's easy for the mainstream to understand how this particular monopolization negatively impacts all of our bottomline.
You don't just have two choices to vote for. You have a system where candidates are chosen in a vote by proxy, meaning that there are a few powerful people in each party who negotiate to decide what candidates are going to run for election. Not only that, but many states are highly polarised meaning that if you are a politician and you want to win the election, you may be highly encouraged to run for the dominant party in your area. What this comes down to is that there are a few powerful people who negotiate about who is going to run, and in many cases who is likely to win. I suspect this is why the media in the US takes a highly polarising stance on politics -- because this suits the people in power.
It's even worse when you consider the presidential elections, though. In that case, there are only 2 sets of candidates to deal with. If you had enough money/influence to spend, how difficult would it be to make sure that the candidates for both parties were selected to be sympathetic to your cause? Or if you can't do that, make sure that the match up in the election is in your favour.
A lot of people on HN have at least some experience with security on computer system. We've seen how people will search for the slightest vulnerability and leverage it to get an advantage. When you look at the electoral system, it's completely insane how vulnerable it is. And with so much money on the line, it would be completely unrealistic to imagine that it's not already completely compromised.
Having said that, I'm not really intending this to be a rant against the US electoral system only. Some systems in the world are slightly better IMHO, but only slightly. Given that the system is likely to be compromised already and the system is only changeable within that compromised structure, I think there is little one can do. Lately I think it's better to act outside of the system. If you want something done, then don't vote for it. You need to get off your bum and actually do it. This is a problem (especially for me!) because most people (including myself) feel like the situation is "good enough" that it's not worth getting involved. However, I encourage people who are more motivated than me to trying to do good with their own 2 hands instead of encouraging them to vote for the "right" person.
We need someone like Ross Perot once more, who showed that disrupting the two party system is possible, but extremely expensive.
Honestly, the only an independent candidate would win in a 3 way race like this is if many different crises hit the US all at once, like housing, unemployment, drug, crime, loss of world power status, food oil water shortages, etc
I'm more surprised that such a "promise" is given any credibility in court to begin with. I'm not familiar with the law, but from my naive understanding a company can basically decide to change their pricing however/whenever they want. So how does stating to a judge that they might have an opportunity to lower prices at some point in the unknown future translate into any kind of legal obligation to do so? To me it just sounds like an empty promise that got them through the court proceedings, and in no way affected their behavior afterwards because why would it?
Which is why we got the Sherman Antitrust Act during the last gilded age. Odds are we won't get one this time around though, as our democratic institutions have been completely defanged in the name of "pro business".
It is also almost always bad for shareholders when companies are merged.
Let's say there are two competing companies, I could myself as an investor chose where to put my money, in one or the other or both. When they merge I lose the ability to place my money how I see fit.
As my professor/dean in financial economics said: If you get to vote on a merger, always vote no!
This seems to assume that the conjoined entity is exactly equivalent in terms of efficiency and market power to the previous two separate entities- That's a pretty radical assumption and it seems you'd have to give some evidence to explain why this would be the case.
I don't have any evidence other than anecdotal and theories.
I used to work in a bank that merged with another and the amount of inefficiencies, double teams/management and general disgruntlement was staggering. I left and so did most of the ones capable of finding new jobs. The ones that stayed behind were not the highest performers.
Another one is from macro economics.
When two companies compete they tend to be very efficient but when they merge they have no more incentives to compete to attract customers. The result is higher prices to customers and lower effectiveness. Imagine what would happen if Intel bough AMD.
But the main issue is that I want to manage my investments myself and not let the companies manage it for me by merging.
The three largest OTT providers (Sling, YouTube TV and DirectTV Now) all raised their prices by $5 recently. This seems similar to how airlines all manage to raise their fares at the same time without explicit coordination (one airline does it, and the others quickly match). I don't think it has anything to do with the merger.
Jon Brodkin has an extremely strong anti-ISP agenda. He writes nothing but posts about the evil ISPs, at a rate of close to one a day.
He does not care that the facts suggest that there's an underlying cost increase that affect all streaming services equally. He has an agenda to push, and nobody is going to stop him from pushing it.
AT&T carries directly or peers with basically every other major internet carrier in the country.
This makes them defacto critical national security infrastructure and thus completely immune to the kind of recourse and accountability that all corporations should be subject to.
The technicality of being an independent and non-governmental entity allows them to collect and in turn share back[to the NSA] information about the traffic that crosses their fabric circumventing those pesky laws which purportedly prohibit the NSA from operating within our borders and inspecting local-only traffic.
AT&T is only going to be checked by legislation now as it has always been. The last time they were broken up they magically reassembled themselves because voters allowed it.
Until we as a country decide that communication infrastructure, like roads, can't be owned by quasi public/private abominations like AT&T but instead only held by us, the people and our government we will continue to get the worst from this present unholy union.
> Just two months ago, AT&T said in a court filing that buying Time Warner would allow it to lower TV prices. The US Department of Justice tried to stop the merger, arguing that it would raise prices for consumers, but a federal judge sided with AT&T. The merger was completed on June 15.
Someone please explain to me why AT&T (or its counsel) isn't in contempt of court or guilty of lying under oath? Did they just use weaselly language in their briefs and testimony that didn't actually say anything of substance?
It seems to me like there's a serious flaw in this process if a company like AT&T can make claims like it did without any obligation to follow through.
IANAL, but "would allow us to" is a far cry from "we will do so"; could be as simple as that? They never _committed_ to lowering prices post-merger, just said they _could_...theoretically.
> IANAL, but "would allow us to" is a far cry from "we will do so"; could be as simple as that? They never _committed_ to lowering prices post-merger, just said they _could_...theoretically.
Yeah, I was thinking along the same lines, but I didn't want to rely on Ars Technica's paraphrase.
I would hope such "arguments" could be efficiently shot down by the observation that, by the same logic, buying Time Warner would similarly allow [AT&T] to buy every American a pony. The likelihood of that happening is similar to the likelihood AT&T would lower its prices post-merger.
If pressed to actually provide reasoning, I'd expect something like "This service was drastically underpriced and would not have been viable long-term. The merger has afforded us greater market vision and economies of scale, and consumers are immediately benefiting by the fact that this increase is substantially smaller than it would otherwise have been, saving them millions."
well AT&T is crappy, but this article is poorly sourced. The CEO has said exactly that before, but the court filing is about what the government could prove, not about what will happen.
AT&T bought assets with that money. They're receiving income that in theory should be offsetting what they spent. It's not like they bought a car and a nice dinner. The money isn't gone.
https://scholarship.law.berkeley.edu/cgi/viewcontent.cgi?ref...