Come Together (and Violate Antitrust Laws?)


Capitol Building

Collusion may actually be a good thing. That’s what newspapers and colleges, separately, are arguing to Congress this summer.

Their individual quests for antitrust exemptions – newspapers to negotiate with tech behemoths and colleges to collaborate on financial aid packages – pose the question of whether collusion can actually benefit consumers in some cases. These guys just want to talk to each other.

The National Association of Independent Colleges and Universities is lobbying Congress to remove rules that keep their members from discussing tuition costs and exploring new business models. That collaboration could lead to lower tuition rates and other solutions to make college more affordable, they say.

NAICU’s nearly 1,000 members include institutions from Harvard University to smaller ones like Haverford College.

Colleges have wanted this exemption for years, but the lobbying effort is expected to pick up as lawmakers discuss a higher education bill. NAICU will first target the House and Senate education committees and try to get a temporary antitrust exemption attached to the Higher Education Reauthorization Act, according to an association spokeswoman.

It’s hard to exactly say what would result from the antitrust reprieve. The association isn’t entirely sure itself, which is why the proposal is framed as an experiment. After five years, Congress could evaluate how colleges handled the opportunity and choose to either extend the exemption or end it.

Newspapers have a similar goal. In July, the News Media Alliance asked Congress to allow newspapers to negotiate collectively with Facebook and Google in order to reassert control over the distribution of news. Representatives from the group – which includes the Wall Street Journal, the Washington Post, and the New York Times – have been meeting with lawmakers and congressional staff since they publicized the request, according to David Chavern, president of News Media Alliance.

Because Google and Facebook dominate online news traffic and eat up digital ad revenue, publishers are forced to bend to their will, the alliance says. The rules of online platforms have “commoditized the news and given rise to fake news.”

Yet existing antitrust laws keep bona fide news organizations from working together to negotiate better deals that will sustain local, enterprise journalism, according to the Alliance.

The coalition raises a good point: Does it make sense to force a small-town newspaper to take on Facebook alone? Example: The Herald-Sun in Durham, North Carolina, has an estimated 21,000 circulation. That’s a pebble compared with the Wall Street Journal’s roughly 2 million subscribers.

Getting any traction on these proposals will be an uphill battle because antitrust regulators take a hard line on collusion, even if it puts a group of organizations at a disadvantage. If members of Congress take interest in this issue, lawmakers will undoubtedly solicit opinions from the Justice Department and Federal Trade Commission.

Clock Ticking

Makan Delrahim, the nominee to lead the Justice Department’s antitrust division, will remain on the sidelines until at least September as the Senate passed on taking up his confirmation before the August recess. Delrahim’s nomination was approved by the Senate Judiciary Committee nearly two months ago. President Trump announced the pick at the end of March. Let’s see what happens when the Senate returns Sept. 5.

Quote of the Week

“There is no need for the same old partisan food fight over our antitrust officials. Let’s get Makan Delrahim to work. FTC nominations will likely include two Republicans and a Democrat. There is no reason why they can’t be swiftly confirmed as a package. If delay on these important confirmations persists, I’ll be back here on the floor to make sure everyone – from consumers to industry – knows it,” Sen. Orrin Hatch (R-Utah) said on the Senate floor Aug. 3.

Occupational Licensing Campaign

Acting FTC Chairman Maureen Ohlhausen has adopted making changes to state licensing boards a core focus of her tenure. She’ll be talking about the issue during a lunchtime panel at Crowell & Moring LLP on Aug. 9.