Saturday, October 11, 2003

Antitrust News: NBC Universal On the Clock

The FTC has wrested jurisdiction from the Justice Department over GE's purchase of Vivendi Universal's entertainment assets. The FTC handled the original Vivendi-Universal merger in 2000, and under the informal agreement between the antitrust agencies, the FTC was permitted to retain its jurisdiction over this succeeding deal.

It's a sign of congressional malfeasance that the antitrust laws do not clearly and unambiguously delineate what mergers and industries are to be reviewed by which agency. It's left to the DOJ and FTC to work it out among themselves. Normally this is done at the staff level but the occasional major case--like the AOL-Time Warner deal, which went to the FTC--has to be decided by the agency heads.

In GE's case, early reports suggest the deal will sail through without major difficulty. Merging NBC with the Universal movie assets will make the company more competitive with the other broadcast networks, all of which are part of larger network-studio conglomerates. Then again, GW Vice Chairman Robert Wright has been an outspoken proponent of the FCC's media deregulation, and GE's acquisition of Hispanic Broadcasting Corp. produced a vehement (and racist) political backlash. Many members of Congress felt the Justice Department and the FCC let GE off the hook on the Hispanic Broadcasting deal; it's not outside the realm of possibility for the FTC to seek favor with its congressional masters by throwing some roadblocks in the Universal deal.

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