The Antitrust Religion in Action

This summer, David Boaz noted how sad it was that Google’s top executives have apparently diverted their attention away from developing the next hot new technology toward building their Washington presence. Declan McCullagh notes that Google’s generosity, which has flowed primarily to Democrats, may be coming back to bite them, as disgruntled Republicans have suddenly gotten religion when it comes to antitrust and are demanding that Google’s acquisition of Doubleclick receive close scrutiny. Strangely, those same Republicans weren’t so worried about a spate of mergers that involved large telecom firms like SBC and Verizon. I’m sure the disparity has nothing to do with the telecom industry’s generous contributions to their campaigns.

As I point out at Techdirt, these sorts of shenanigans shouldn’t surprise us. Modern antitrust law gives government bureaucrats seemingly unlimited discretion to second-guess corporate mergers based on the flimsiest of pretexts, or to attach arbitrary conditions to merger approvals. Last winter, for example, as a condition of the BellSouth merger, two FCC commissioners coerced AT&T into accepting “network neutrality” rules that Congress had earlier failed to adopt, rules that apply to no one else in their industry. And don’t forget the XM/Sirius debate, in which terrestrial broadcasters—their principal competitors—trotted out the ludicrous argument that the merged company would have no competition. XM and Sirius’s fundamental sin seems to be that they hadn’t invested as much money on Washington lobbyists as the NAB had.

The rule of law demands that government decision-making proceed according to objective, clearly-defined, and predictable rules. Antitrust law as it’s currently enforced doesn’t qualify, and as a result it’s ripe for abuse. And if you believe Edwin Rockefeller, this isn’t new. He argues that antitrust law has always been primarily a weapon for politically-connected companies to use against their rivals.