Sunday, November 17, 2002

From the Role Reversal Department

According to this L. A. Times article, the Justice Department is investigating possible antitrust violations by the nation's two largest alternative newspaper chains, which allegedly agreed to sell each other their competing divisions in Cleveland and Los Angeles in order to reduce competition. The case is ironic in a couple of different ways, as author Tim Rutten observes:
If federal prosecutors find sufficient evidence to pursue a case, it would be a novel moment on at least two counts: One would be the spectacle of the nation's leading alternative weeklies, with their roots in the insurgent journalism of the 1960s counterculture, being treated like a 19th century cartel. The other would be the very strait-laced John Ashcroft's Justice Department entering the legal lists to uphold the commercial rights of massage parlor operators, escort services and phone sex operators, which provide the bulk of the chains' classified advertising.
The case is, unfortunately, consistent with current antitrust doctrine as exemplified in the recent Microsoft case. In that case, the defendant could be characterized as a monopolist only by adopting a very narrow interpretation of the market in question: MS was said to have a monopoly on *proprietary* operating systems for the *PC* platform, thus ignoring the software company's two main competitors: non-proprietary operating systems like Linux and the proprietary operating system used on Apple computers. The case against New Times Media and Village Voice Media relies on a similarly narrow definition of the market in question: the companies are being treated as competitors in the market for *alternative newspapers*, thus ignoring the vast amount of competition both papers face in form of mainstream print and broadcast media, not to mention the Internet.

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