Competition Can Serve Newspaper Industry, Public Interest: Varney

This posting was written by Mark Engstrom.

Christine A. Varney, Assistant Attorney General in charge of the Department of Justice Antitrust Division, addressed the Newspaper Association of America on March 21 concerning the role of the antitrust laws and the Antitrust Division in promoting competition in the newspaper industry.

Her remarks, “Dynamic Competition in the Newspaper Industry,” offered a perspective on competition issues for newspapers in light of the technological developments that have accompanied the advent of the Internet.

Preservation of Competition

After reminding listeners that the newspaper industry survived the explosive growth of radio and television through the use of competitive innovations, Varney discussed the Antitrust Division's role in preserving competition in the industry and explained the method of analyzing collaborations and mergers.

According to Varney, “vigilant antitrust enforcement” was needed to ensure that anticompetitive conduct did not “tip the market” in a particular direction. Vigorous competition would best serve consumer interests. Calls for antitrust immunity for news organizations have therefore been rejected.

Immunity for Joint Operating Agreements

Although the Newspaper Preservation Act (NPA) extended antitrust immunity to newspapers that signed joint operating agreements, many newspaper owners still faced significant difficulties.

Indeed, the NPA exemption “may well have contributed to industry sluggishness.” Any new exemption from the antitrust laws would thus appear to be “particularly inappropriate at this point” in time.

Mergers

Addressing the issue of mergers, Varney stated that the goal of the Antitrust Division was to identify and challenge competitively harmful mergers while avoiding unnecessary interference with mergers that were competitively benign.

Merger-specific efficiencies that would offset the potential harm posed by an increase in market concentration would be considered. Further, parties to a merger could defend the merger on the ground that one of them was failing.

Non-merger collaborations among newspapers did not raise competition issues when they enabled newspapers to cut costs, improve services, or offer new or better content, Varney assured.

The Antitrust Division's “agile” approach to newspaper collaborations allowed companies to request a business review by the division if the companies were uncertain about the legality of their collaborative conduct.

The text of the remarks is available here at the Department of Justice Antitrust Division’s website.