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Larry Downes comments on Disney-Fox merger

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How the Disney-Fox Deal got DOJ's Greenlight Quicker Than Expected, Variety (June 27, 2018)

Larry Downes, senior industry and innovation fellow at the Georgetown Center for Business and Public Policy, said that he was “very surprised” by the approval. “During a six-month period when the agency was pursuing a novel and ultimately failed theory of expanding antitrust scrutiny to vertical mergers in a two-year review of AT&T-Time Warner, there was apparently no analysis about the most obvious horizontal problem in the Disney-Fox deal: the studios and their content,” Downes said in an e-mail.

He noted that Disney and Fox are No. 1 and No. 2 at the box office, “with some of the most valuable intellectual property assets going forward for new services including over-the-top video and direct-to-consumer content. Disney has already announced plans to offer its own [over-the-top] service and has already removed content from competing platforms including Netflix — that is, actual foreclosure. And with a controlling interest in Hulu (again, no comment from the DOJ), its stated intention to withhold will be all the more effective.”

Downes indicated he is not saying the deal shouldn’t be approved, “but to approve it without any comment on the risks of concentration or any mitigation or protections for others in the supply chain comes as quite a shock.”