Great question. It is hard to evaluate his analysis without seeing it! And I have not seen it so cannot tell whether it is different data, different market definition, or something else. The general point remains the same, I think. The DOJ's case would be pretty sensitive to market definition and is pretty vulnerable either way. Believe it or not, even 40 percent isn't significantly above the threshold. Including just one of the rivals discussed (e.g. YouTube) in the market would very likely drop it below the PNB threshold. A merger challenger would have to prevail on a whole series of fairly contentious points to prevail.
Makan Delrahim, Former Assistant Attorney General for the Antitrust Division of the United States, argues that the relevant combined market share of NFLX/WBD is 41%.
Here's your quote: If you take one thing from today’s COTM have it be this: even in the DOJ’s presumptive market definition involving Streaming Video on Demand (“SVOD”) and NOTHING ELSE, the DOJ’s barely above the PNB presumption threshold at 30 percent.
41% isn't barely above the 30% threshold. Why do you think Delrahim has it wrong?
This is a strong and careful antitrust analysis, and I agree that—within the traditional price/output and substitution framework—the litigation risk is likely being overstated.
One thing I would add, not as a counterargument but as an orthogonal observation, is that markets may be pricing something here that antitrust doctrine is structurally unable to see: a long-lived behavioral control asset (in the form of persistent infrastructure) that compounds across products and over time.
That asset doesn’t show up in market-definition exercises, but it does show up in control premiums and deal dynamics—for example, in the fact that both the Netflix and Paramount bids moved WBD’s share price from roughly $20 to ~$29 despite materially different deal structures and asset carve-outs.
In that sense, both things can be true: the merger may clear antitrust scrutiny and still represent a meaningful consolidation of behavioral infrastructure that markets are correctly repricing—even if courts are not equipped to evaluate it.
I’m all for corrections. But this one seems demonstrably untrue! I voted as Commissioner in favor of merger enforcement in 90 percent of the votes before me. The 10 percent dissent rate leaves many unsatisfied. Indeed. But the facts are the facts!
Great question. It is hard to evaluate his analysis without seeing it! And I have not seen it so cannot tell whether it is different data, different market definition, or something else. The general point remains the same, I think. The DOJ's case would be pretty sensitive to market definition and is pretty vulnerable either way. Believe it or not, even 40 percent isn't significantly above the threshold. Including just one of the rivals discussed (e.g. YouTube) in the market would very likely drop it below the PNB threshold. A merger challenger would have to prevail on a whole series of fairly contentious points to prevail.
Makan Delrahim, Former Assistant Attorney General for the Antitrust Division of the United States, argues that the relevant combined market share of NFLX/WBD is 41%.
Here's your quote: If you take one thing from today’s COTM have it be this: even in the DOJ’s presumptive market definition involving Streaming Video on Demand (“SVOD”) and NOTHING ELSE, the DOJ’s barely above the PNB presumption threshold at 30 percent.
41% isn't barely above the 30% threshold. Why do you think Delrahim has it wrong?
This is a strong and careful antitrust analysis, and I agree that—within the traditional price/output and substitution framework—the litigation risk is likely being overstated.
One thing I would add, not as a counterargument but as an orthogonal observation, is that markets may be pricing something here that antitrust doctrine is structurally unable to see: a long-lived behavioral control asset (in the form of persistent infrastructure) that compounds across products and over time.
That asset doesn’t show up in market-definition exercises, but it does show up in control premiums and deal dynamics—for example, in the fact that both the Netflix and Paramount bids moved WBD’s share price from roughly $20 to ~$29 despite materially different deal structures and asset carve-outs.
In that sense, both things can be true: the merger may clear antitrust scrutiny and still represent a meaningful consolidation of behavioral infrastructure that markets are correctly repricing—even if courts are not equipped to evaluate it.
I’m all for corrections. But this one seems demonstrably untrue! I voted as Commissioner in favor of merger enforcement in 90 percent of the votes before me. The 10 percent dissent rate leaves many unsatisfied. Indeed. But the facts are the facts!
Happy Nee Year!