November be affected after they merge. This means that

November of 2017 marked the beginning of a large controversy
for the United States Department of Justice Antitrust Division. As they filed a
suit to bar AT&T’s $85.4 billion bid for Time Warner1, the
public was quick to point this unusual decision towards several considerable factors.
While some blame this “abrupt change of antitrust law”2 on political
interference due to Donald Trump’s prevalent dislike towards CNN, others wonder
why this merger would get sued since almost every other previously proposed
vertical merger during the past years passed through antitrust regulations. Although
many of these explicit accusations are present against the Department of
Justice’s decision, I believe that this merger must be blocked because it concentrates
too much power in the hands of a few, it
serves as a harmful leader for establishing more monopolies, and it becomes a
domineering threat for smaller companies.

            Vertical
mergers are thought to be the adjoining of companies in completely different industries
and therefore, it is assumed that the level of competition will not be affected
after they merge. This means that this AT and Time Warner union will not
yield a sudden decline or increase of additional competition. However, this
merger does show immense chances that this single entity will receive an unhealthy
and unjust advantage compared to other companies. AT itself has admitted
that it will utilize Time Warner’s high status as an entertainment brand “to
raise prices for any other competing video distributor and to slow competition
from online video.”3 The powerful combination of their tactics to be
both a distributor and a content creator will ultimately lead to increased
prices for consumers and other surrounding companies.

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            If this
merger is allowed spring into action, other companies could follow, resulting
in vast monopolies within our market. Mark Thoma, an economist that once
featured on CBS’s “Moneywatch”, emphasizes that “when firms have such power,
they charge prices that are higher than can be justified,”5 which leads
to lower demand from consumers. This in turn leads to an inefficient market
where demand is far too low due to high prices. Therefore, if the Department of
Justice allows this merger to take place, severe economic consequences could
result as it expands and serves as an example to other firms that wish to
become monopolies.

            AT
wishes to employ a technique coined “zero-rating” after the merger occurs. This
strategy will allow consumers to view certain content and use several services
without it affecting their data plan caps.4 As a result, other
distributors with similar content will be disadvantaged because users will
choose AT’s content over theirs in an effort to not drain their precious
“data allotment.” Other companies, especially small businesses and startups
will find themselves in an inevitable situation, where they will be stuck in a
position unable to handle that kind of competition.

            Due to an
unfair concentration of power, the likelihood of setting an example for
negative monopolies, and the poor position that it would leave small companies
in, this merger should not move forward. While several understandable arguments
are provided as to why the Department of Justice should not sue to block the
AT&T and Time Warner merger, it is evident that many negative consequences
could occur as a result. 

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