Limiting Competition

The much-admired Supreme Court Justice Hugo Black may be rolling in his grave at the prospect of a merger between 21st Century Fox and Time Warner Inc., which would reduce control of the major Hollywood studios to five owners, from six, and major television producers to four, from five.

“The widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public,” he wrote in the majority opinion that decided a 1945 antitrust case involving major newspaper publishers and The Associated Press. “The First Amendment affords not the slightest support for the contention that a combination to restrain trade in news and views has any constitutional immunity.”

Fox and Time Warner may no longer publish old-media newspapers or magazines, but they certainly disseminate information and opinions that may be even more vital to the “welfare of the public” today than the newspapers of Justice Black’s era. HBO alone, one of Time Warner’s cable channels, produces “Real Time With Bill Maher,” “Last Week Tonight With John Oliver” and acclaimed documentaries like “The Case Against 8,” about the struggle for marriage equality, and the “Paradise Lost” series, which examined the murder convictions of the group of white teenagers known as the West Memphis Three.

How many of those would be produced under the ownership of a Rupert Murdoch, or for that matter, any other media mogul who controlled close to 40 percent of all major film production and nearly 20 percent of all television?

A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity. Monopolies are thus characterized by a lack of economic competition to produce the good or service and a lack of viable substitute goods.

Oligopoly is the middle ground between monopoly and capitalism.

Any market structure characterized by a downward sloping demand curve has market power -- monopoly, monopolistic competition and oligopoly.

Monopolies derive their market power from barriers to entry -- circumstances that prevent or greatly impede a potential competitor's ability to compete in a market.