By David Oxenford
Press reports following a speech this week by the head of the Department of Justice’s Antitrust Division have many in the broadcast industry paying attention. In response to a question following a speech at a Washington, D.C. conference by Makan Delrahim, the chief of the DOJ’s Antitrust Division, he is reported to have said that the DOJ will be holding a workshop to assess whether online advertising should be considered in assessing the local television marketplace, and whether the facts should support a change in the Department’s assessment of mergers by considering online advertising as part of the same competitive market as local TV advertising.
Why is this important?
In recent years, particularly in its review of combinations such as last year’s proposed Sinclair-Tribune merger, the DOJ has looked only at the marketplace for over-the-air television in assessing a transaction’s likely competitive impact, refusing to look at the competition for viewers and advertisers that now comes from online sources like YouTube, Facebook and the many other digital platforms competing in today’s media marketplace. Were the DOJ to conclude that digital platforms are indeed part of the same market as TV, there is a greater likelihood that transactions previously questioned on antitrust grounds could see a more favorable reception from the DOJ. This could also have an impact on radio ownership – where the FCC is just about to embark on its own review of the local radio ownership rules.
Proponents of ownership deregulation argue that digital competition in radio, too, must be considered in the assessment of any radio ownership limits. If the FCC were to significantly relax its radio ownership rules, there has been concern that the DOJ could step in and stop new ownership combinations that might otherwise be allowed by any FCC rule change. Including digital advertising and online audiences in any marketplace assessment decreases the risk of the DOJ playing spoiler and stopping radio transactions that might otherwise be approved if the FCC does relax its rules as a result of the Quadrennial Review of the ownership limits. So the announcement of any DOJ review of the impact of online competitors in assessing broadcast markets is an important one that should be watched as these issues play out in coming months.