Comcast’s failed acquisition of Time Warner Cable (“TWC”) presents a lesson in the types of antitrust harms that merger enforcers in the United States are willing to pursue.
Using traditional “horizontal” merger analysis, the combination would have resulted in almost no reduction of head-to-head competition, as there were very few geographic areas in which the two companies were head-to-head rivals. Nevertheless, the enforcers, the Department of Justice’s Antitrust Division (“DOJ”) and the Federal Communications Commission (“FCC”), which have concurrent jurisdiction to review communications mergers, took a broader view of how harm should be analyzed and found the transaction would have significantly reduced competition – and in the face of that resistance, the parties abandoned the transaction.
The demise of this deal represents a stark reminder that a lack of significant horizontal concerns does not automatically mean the deal will sail through the regulatory process if other complexities that would affect competition are present.
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