Lessons from AT&T/Time Warner

6 Pages Posted: 12 Jul 2019

See all articles by Dennis W. Carlton

Dennis W. Carlton

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Mark A. Israel

Compass Lexecon

Allan Shampine

Compass Lexecon

Date Written: July 11, 2019

Abstract

AT&T and Time Warner is the U.S. Department of Justice’s first vertical merger challenge in decades. The merging parties hired us initially to provide economic analyses of the antitrust issues raised by the merger and ultimately to assist with and testify in the litigation. There are three keys lessons that we draw from the outcome of the litigation for future antitrust practice. First, history matters, particularly the outcomes of similar integrations or integrations, both in predicting price effects and in testing merger simulation models proposed by economic experts. Second, one should be careful of simulation models of vertical transactions as they can be complicated and fragile. Third, the fact that the courts credited cost-saving efficiencies as credible, cognizable and relevant to the analysis of net harm is likely to be important for the analysis of future mergers, as the role of efficiencies in merger litigation remains an open question.

Keywords: antitrust, AT&T, Time Warner, vertical merger

JEL Classification: K21, L4

Suggested Citation

Carlton, Dennis W. and Israel, Mark A. and Shampine, Allan, Lessons from AT&T/Time Warner (July 11, 2019). Available at SSRN: https://ssrn.com/abstract=3418362 or http://dx.doi.org/10.2139/ssrn.3418362

Dennis W. Carlton

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
312-322-0215 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Mark A. Israel

Compass Lexecon ( email )

United States

Allan Shampine (Contact Author)

Compass Lexecon ( email )

United States

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