Share this page!

Matt Stoller Profile picture
Twitter logo
Feb 4 • 23 tweets • 9 min read
1. There is a major change afoot among antitrust regulators. The FTC's Lina Khan and the Antitrust Division's Jonathan Kanter are not screwing around, and are about to take on all the money and power in the world.

Let's talk merger policy. mattstoller.substack.com/p/mergers-ruin…
2. As anyone who's been through one knows, mergers suck. A few weeks ago, @adamconover described why his show - Adam Ruins Everything - was canceled. The show was popular, but that didn't matter.

AT&T bought Time Warner, and wrecked it.
3. In 2016, AT&T breathlessly announced it would buy Time Warner. We have phones, they have TV shows. What if... people watched TV shows on their phones?!?! Someone forgot to mention that people already did that. But whatever. about.att.com/story/att_to_a…
4. The CEO of AT&T argued that the two firms would be super efficient together. Trump's Antitrust division challenged the merger, but Judge Richard Leon ruled for AT&T, saying he was confident the firms would see vast efficient gains. The merger was on. wsj.com/articles/decod…
5. How did it work out? This week, AT&T announced it was *undoing the merger.* Complete and total failure. And really embarrassing for Judge Leon, who was wrong about, well, almost everything. mattstoller.substack.com/p/mergers-ruin…
6. AT&T broke its pledges. It fired workers, raised prices, canceled services, and even created an anime streaming monopoly by selling Crunchyroll to Sony! It also screwed shareholders, who have lost significantly over the past five years. theinformation.com/articles/sonys…
7. AT&T-Time Warner is not a one-off. Most big mergers fail. Two financial analysts looked at 268,350 mergers from 2000-2021.

“Corporate acquirers in the US generally tended to underperform the market. And the bigger the deal, the worse the returns." us13.campaign-archive.com/?u=6dc62f30751…
8. Judge Leon is also not unusual. Judge Victor Marrero gave the green light to T-Mobile buying Sprint. That merger has also been a disaster. Broken promises on prices, layoffs, and cell phone stores shut down. Just a total embarrassment on every level. wired.com/story/opinion-…
9. Nearly every industry with dominant firms is that way because of what should be illegal mergers.

Google?

Applied Semantics (2003), Keyhole (2004), Android (2005), Urchin (2005), YouTube (2006), and DoubleClick (2007), Admob (2009), ITA (2011), Waze (2013), Nest (2014)...
10. CVS?

People Drug (1990), Revco D.S. (1997), Soma.com (1999), Phar-Mor (2002), Eckerd (2004), Sav-On and Osco drugstores (2006), Caremark RX (2007) Long Drug Stores (2008), Rx America (2008), Target’s pharmacies (2015), Aetna (2018). mattstoller.substack.com/p/mergers-ruin…
11. Quest Diagnostics?

MedPlus (2001), Unilab Corporation (2003), LabOne (2005), Focus Diagnostics (2006), Hemocue (2007), AmeriPath (2007), Athena (2011), Celera (2011), Solstas Lab (2014), Cleveland HeartLab (2017), Oxford Immunotec (2018)...
acutecondition.com/p/quest-labcor…
12. Spotify?

Echo Nest (2014), Seed (2015), CrowdAlbum (2016), Sonalytic (2017), MightyTV (2017), Mediachain (2017), Niland (2017), SoundTrap (2017), Loudr (2018), Gimlet (2019), Anchor (2019), SoundBetter (2019), Parkast (2019), and The Ringer (2020). mattstoller.substack.com/p/will-spotify…
13. Why is Boeing the only major U.S. aerospace firm? And why did it screw up so badly on the Boeing 737 Max? Mergers! Rockwell Collins and McDonnell Douglas... mattstoller.substack.com/p/the-coming-b…
14. Even the monopoly in cheerleading is a result of a series of mergers, most notably Varsity and Jam Brands in 2015 (but also many others). mattstoller.substack.com/p/the-coming-c…
15. I could go on and on, as the merger waves do. Gold mines. Academic library services. Lacrosse leagues and teams. Ammunition. Mail sorting software. Tactical helmets. Street sweeping. Video games. Etc… hcn.org/issues/54.1/so…
16. But now there's a change. Antitrust Division chief Jonathan Kanter gave his first speech last month, and chastised bad economic analysis and poor judicial precedent on mergers. justice.gov/opa/speech/ass…
17. Meanwhile, Lina Khan's FTC, and the Pentagon, challenged the Lockheed Aerojet merger. And now defense sector consolidation might be over. mattstoller.substack.com/p/sometimes-an…
18. Behind this shift is a recognition that the last forty years of merger enforcement have failed. In 1982, Reagan's antitrust chief Bill Baxter wrote what are called merger guidelines essentially ending enforcement. Khan/Kanter will finally reverse that. mattstoller.substack.com/p/mergers-ruin…
19. Khan and Kanter have asked for public comment on how to revise these guidelines. Over the next month or so, I'll be showing people how to offer feedback on mergers, positive or negative. Here's the link to the request for information. regulations.gov/docket/FTC-202…
20. This is a big deal. Mergers are the key fulcrum that has consolidated power in society. Now, for the first time in our lifetimes, antitrust enforcers are genuinely pushing back, with real merger challenges and now a revamp of these guidelines. mattstoller.substack.com/p/mergers-ruin…
21. The consequences of this shift in policy could be catalytic. Large firms, rather than buying competitors, will have to invest in building new products and services. The endless waves of layoffs due to mergers will slow. buzzfeednews.com/article/mattst…
22. Moreover, we will likely see a return of corporate research labs, which were a result of antitrust that prevented firms from buying small innovative competitors. journals.uchicago.edu/doi/pdfplus/10…
23. Political news can often seem gloomy. But this is very very good news. With all the noise around us pressing the notion that politics can’t deliver, in this corner of the world, it already is. mattstoller.substack.com/p/mergers-ruin…

• • •

Missing some Tweet in this thread? You can try to force a refresh
　

Keep Current with Matt Stoller

Matt Stoller Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @matthewstoller

Matt Stoller Profile picture
Feb 4
1. Apple chose to shoot Facebook in the head and move Facebook's ad revenue to Google, because Apple shares in Google's profits.
2. Apple's decision to block tracking on mobile devices significantly harmed Facebook's ad business, which is good. But Apple did not apply the same provisions to Google's mobile services. So ad money moved from FB to Google. Why did Apple do this?
3. It's simple. Google pays Apple something like $15B a year for Google search to be the default on the iPhone's Safari browser. That's at the heart of the DOJ antitrust suit against Google filed in 2020.
Read 5 tweets
Matt Stoller Profile picture
Feb 3
The Senate markup on the bill to break app store monopoly power is on deck right now.
California Senator Dianne Feinstein opposes the bill because it targets "three California companies," Apple, Google, and Microsoft.
And now California Senator Alex Padilla is up. He's mostly just trying to avoid getting cross-wise with either big tech, or with labor, which doesn't like big tech.
Read 4 tweets
Matt Stoller Profile picture
Feb 2
I think the most surprising thing I've learned over the last couple of years is just how insane elite liberal institutions have become. I don't really know what to do about it.
The assertive lunacy of most American elite institutions is a widely held opinion within the elites, but unstated publicly because the retribution isn't worth it. I happen to care less about social sanction than most of my peers.
I keep going back to this thread from @AlecMacGillis. In a set of increasingly bizarre moral panics, American liberals have decided to overlook the costs of destroying society.
Read 4 tweets
Matt Stoller Profile picture
Jan 28
"Antitrust is the main concern for merger-arbitrage funds, according to a Bloomberg News survey this month of 12 U.S.-based fund managers, analysts, and brokers."

bloomberg.com/news/articles/…
"He added that the flurry of legal challenges was a primary reason that many of the deals announced last year involved $10 billion or less." - Peter Orszag, the C.E.O. of Lazard’s financial advisory business
"Mega takeovers in the US — deals north of $25bn or $50bn — plummeted in 2021, according to data from Refinitiv, as companies particularly in pharma and tech have shied away from taking regulatory risks." - Financial Times ft.com/content/03a2df…
Read 5 tweets
Matt Stoller Profile picture
Jan 27
"On the basis of his antitrust record, he is an unjust man. Breyer is the candidate of big business and monopoly in America.”

I look back at the legacy of Stephen Breyer, perhaps the most important ally of monopoly power over the last forty years.
mattstoller.substack.com/p/stephen-brey…
According to former FTC official Charles Mueller, Breyer straight-up lied during his confirmation hearing, telling Senator Metzenbaum that antitrust plaintiffs sometimes won and sometimes lost in his court. In fact they always lost. mattstoller.substack.com/p/stephen-brey… Image
"When his retirement announcement came, I was watching an event on antitrust at the Mercatus center, a libertarian forum sponsored by firms like Google. The big law partners, upon learning the news, immediately turned from bashing Lina Khan to lamenting Breyer’s retirement."
Read 6 tweets
Matt Stoller Profile picture
Jan 20
Senate Judiciary committee passes big tech antitrust bill on nondiscrimination. 16-6.
Big tech probably spent tens of millions opposing this bill alone. Apple CEO Tim Cook and Google CEO Sundar Pichai were calling Senators personally. A bipartisan thrashing is not the outcome they wanted.
As this bill moves, remember that it's just as possible for the bill to get stronger on the floor as weaker. Far more importantly than this bill, the Senate Judiciary just opened the floodgates. Now everyone knows there's an overwhelming majority to address big tech power.
Read 4 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Like this author's thread?

Get emails when @matthewstoller has new unrolls!

Check out other threads from @matthewstoller!

Read all threads by @matthewstoller

:(