Jon Baker (FCC, American University) has posted an article summarizing the FCC’s analysis of the Comcast-NBCU merger. Here is the abstract.
The FCC’s analysis of the Comcast-NBCU transaction fills a gap in the contemporary treatment of vertical mergers by providing a roadmap for courts and litigants addressing the possibility of anticompetitive exclusion. The FCC identified the factors any judicial or administrative tribunal would likely consider today in analyzing whether a vertical merger would lead to anticompetitive input or customer foreclosure, and a range of economic methods potentially relevant to applying that template to the facts of a transaction. Notwithstanding the difference between administrative adjudication under a public interest standard and judicial decision-making under the Clayton Act, the legal framework and economic studies the Commission employed promise to influence the approach that antitrust tribunals will now take in evaluating vertical mergers.
Its well worth reading and provides a good summary of the FCC’s analysis of the transaction (which is also worth reading in its entirety).
As we’ve highlighted, however, notwithstanding the fact that the FCC’s general framework for economic analysis of the merger was consistent with modern antitrust analysis (its hard to comment on anything but the general framework of economic analysis without delving deeply into the details, which I have not done yet), its tough to swallow the Comcast-NBCU Order as a “roadmap” or model given the long list of non-merger specific conditions imposed by the Commission (see here for a list). The breadth of the conditions tends to undermine the claims that FCC merger review process, or components of it, should be exported. The Joint Concurrence of Commissioners McDowell and Baker notes a similar objection:
The Commission’s approach to merger reviews has become excessively coercive and lengthy. This transaction is only the most recent example of several problematic FCC merger proceedings that have set a trend toward more lengthy and highly regulatory review processes that may discourage future transactions and job-creating investment.
In this instance, our review exceeded its limited statutory bounds. Many of the conditions in the Memorandum Opinion and Order (Order) and commitments outlined in separate letter agreements were agreed to by the parties. The resulting Order is a wide-ranging regulatory exercise notable for its “voluntary” conditions that are not merger specific. The same is true for the separate “voluntary” commitments outlined in Comcast’s letter of agreement dated January 17, 2011. While many of these commitments may serve as laudable examples of good corporate citizenship, most are not even arguably related to the underlying transaction. In short, the Order goes too far.