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from Nicholas Wapshott:

The analogue titans’ last gasp against the digital giants

amazon-hachette

Amazon’s bullying of the book publisher Hachette and the uninvited bid by Rupert Murdoch’s 21st Century Fox to swallow rival TimeWarner has caused some economists and commentators to ask, why are such aggressive moves not attracting the attention of the Justice Department’s trust-busters? Both moves are textbook examples of how monopoly power can abuse -- or so they would have seemed not long ago.

At stake are the benefits that consumers and employees alike enjoy from the proliferation of competing companies operating in a free market. For markets to work freely and fairly, there must be enough companies competing; when the critical mass of businesses sinks below a certain number, monopolies occur, which is bad for consumers. When that happens, governments in mature societies intervene to prevent over-consolidation and protect people from exploitation.

This isn’t socialism; it is how the free market is meant to work. It is the ordered way of doing business advocated by free-market gurus like Friedrich Hayek, who believed the integrity of free enterprise was paramount to ensure that prices are arrived at fairly.

Amazon CEO and Chairman Bezos receives the Citation of Merit on behalf of the Apollo F-1 Search and Recovery Team during the 110th Explorers Club Annual Dinner, at the Waldorf Astoria in New YorkBut after more than a century of intervening to keep markets honest, U.S. antitrust legislation is proving inadequate to the task. When industries and markets were clearly defined, it was easy to see what needed doing. When John D. Rockefeller’s Standard Oil snaffled the gasoline market, the Supreme Court, in 1910, declared it an illegal monopoly -- and demanded it be broken up.

from The Great Debate:

The analogue titans’ last gasp against the digital giants

[CROSSPOST blog: 2586 post: 1600]

Original Post Text:
amazon-hachette

Amazon’s bullying of the book publisher Hachette and the uninvited bid by Rupert Murdoch’s 21st Century Fox to swallow rival TimeWarner has caused some economists and commentators to ask, why are such aggressive moves not attracting the attention of the Justice Department’s trust-busters? Both moves are textbook examples of how monopoly power can abuse -- or so they would have seemed not long ago.

At stake are the benefits that consumers and employees alike enjoy from the proliferation of competing companies operating in a free market. For markets to work freely and fairly, there must be enough companies competing; when the critical mass of businesses sinks below a certain number, monopolies occur, which is bad for consumers. When that happens, governments in mature societies intervene to prevent over-consolidation and protect people from exploitation.

from Nicholas Wapshott:

Rupert Murdoch’s troubles are far from over

News Corporation CEO Rupert Murdoch leaves his flat with Rebekah Brooks, Chief Executive of News International,  in central London

The acquittal of Rupert Murdoch’s favorite executive, the flame-haired Rebekah Brooks, on charges of phone hacking and destroying the evidence might have marked the final act in one of the most bruising and expensive chapters in the history of News Corp.

It hasn’t turned out that way.

The $85 million that Murdoch paid to help keep his protégée out of jail has done little more than stoke the fires of resentment against his company in Britain. It also reminded U.S. federal authorities of the likelihood that similar crimes have been committed in America.

from Breakingviews:

Tribune politics play into Murdoch’s hands

By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

It isn’t often that the tarnished Rupert Murdoch finds himself looking anything like a white knight. Tribune Co’s plan to spin off its newspapers seems, though, to put the media mogul squarely in that role.

from Nicholas Wapshott:

Contemplating life after Murdoch

Rupert Murdoch has been summoned back to explain to British lawmakers comments he made at a private meeting with his London tabloid journalists. It seems that whatever regrets he has expressed in public about the phone-hacking and police bribery scandal that has so far cost his company $57.5 million, in private he thinks the affair has been overblown. There have been 126 arrests so far, with six convictions, a further 42 awaiting trial, and up to 10 more awaiting charges.

The Fox boss told his reporters and editors, all facing jail time, he didn’t see why the police were making such a fuss about “next to nothing”; that “payments for news tips from cops? That’s been going on a hundred years”; and promised them -- though he was careful not to run afoul of the law -- he would give them their jobs back “even if you’re convicted and get six months, or whatever.” He also pledged to use his newspapers to exact revenge on the “incompetent” police for pursuing the investigation so vigorously.

from Breakingviews:

Zuckerberg and Murdoch rock air-governance shows

By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Mark Zuckerberg and Rupert Murdoch breezed through their latest air-governance shows. Facebook on Tuesday held its first annual meeting as a public company while News Corp shareholders on the same day agreed to split the company. Both may have served the greater good this time, but when founders dominate the voting, as in these two cases, it’s not a given.

from Alison Frankel:

News Corp deal: a new way to police corporate political spending?

On Monday, the directors and officers of Rupert Murdoch's News Corp agreed to settle a derivative suit accusing them of breaching their duty to shareholders by failing to avert the phone-hacking scandal at the company's British newspapers. News Corp's insurers will pay $139 million, in what shareholder lawyers atGrant & Eisenhofer called the largest-ever cash settlement of derivative claims in Delaware Chancery Court. The settlement, which comes as News Corp prepares to split its news and entertainment branches into two publicly traded companies, was produced after several months of mediation that took place while the company's motion to dismiss was pending before Vice Chancellor John Noble.

The cash portion of the deal (which will be eventually reduced by legal fees paid to G&E, co-lead counsel fromBernstein Litowitz Berger & Grossmann and several other plaintiffs firms that managed to grab a piece of the case) is obviously the big news, but among the many corporate governance enhancements detailed in the memorandum of understanding between News Corp and shareholders, you'll find what appears to be a historic concession by the company: News Corp has agreed to disclose its campaign and political action committee contributions to shareholders and its lobbying and Super PAC spending to the board. According to two advocates for corporate political transparency, this settlement apparently marks the first time that shareholders have used the vehicle of a derivative suit to obtain enhanced disclosure of corporate political spending. "I think it's terrific," said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington (CREW). "Any way to force companies to disclose spending is good for democracy."

from John Lloyd:

A free press without total freedom

Journalism gyrates dizzily between the dolorous grind of falling revenue and the Internet’s vast opportunities of a limitless knowledge and creation engine. On the revenue front, no news is good. The just-published Pew Center’s “State of the US News Media” opens with the bleak statement that “a continued erosion of news reporting resources converged with growing opportunities for those in politics, government agencies, companies and others to take their messages directly to the public.” Not only, that is, is the trade shrinking, but those who once depended on its gatekeepers have found their own ways to visibility.

Journalists’ task, as large as any they have collectively faced in 400 years of their trade’s existence, is to find a way to continue the journalism that societies most need and citizens are least willing to pay for: detailed, skeptical, truthful, fair, investigatory writing and broadcasting. It’s a big ask. The British are in the process of not answering it. They are staging a sideshow: not an unimportant one, but in a minor key all the same.

from Nicholas Wapshott:

The crumbling of the Murdoch dynasty

Rupert Murdoch has had a rough few weeks. He had to race to Melbourne, Australia, to visit his 103-year-old mother, Dame Elisabeth, who has died in Australia.* There is nothing like the death of your mother to remind you of your own mortality.

Then last month the political party he supports and largely owns lost the election. When you have Sarah Palin, Mike Huckabee, Roger Ailes, Karl Rove, John Bolton, Liz Cheney, William Kristol, Dick Morris, Oliver North, Rick Santorum, and Newt Gingrich on the books and have all your media properties conduct a virulent, ad hominem campaign against the president, then watch the Republicans lose so convincingly, it must be hard to know where you went wrong.

Then on Monday Murdoch announced his reluctant splitting of News Corp. in two, dividing the company between News Corp.--containing the mostly hard-copy waning press properties he dabbles in as an expensive hobby--and Fox Group, made up of the money-making media properties, like the Fox movie studio, the Fox TV network, and Fox News, that the company’s non-family and therefore non-voting shareholders prefer. The restructuring was forced upon Murdoch in the wake of the revelation that phone hacking had become quotidian at his British newspapers, a crime of which, despite his addiction to editorial micromanagement, he has always denied all knowledge. Had he not taken the initiative and divided his company, the report by Lord Justice Leveson on corruption in the British press might have demanded a more painful remedy.

from Jack Shafer:

The Daily didn’t fail–Rupert gave up

When you're as wealthy as Rupert Murdoch ($9.4 billion) and you control a company as resource-rich as News Corp (market cap $58.1 billion), shuttering a 22-month-old business like The Daily doesn't signify failure as much as it does surrender.

Murdoch knew what he was getting into when he launched the iPad-only (and then smartphone, Android tablet, and Kindle Fire) publication in February 2011. At a press conference, the mogul claimed to have invested $30 million pre-launch and assumed running costs of about $500,000 a week. According to a report in the New York Observer, attributed to a "source," the operation was amassing annual losses of $30 million. But again, for someone like Murdoch, $30 million is chump change. His New York Post loses up to $70 million a year, according to some accounts, and you don't see him closing it. Such losses are rounding errors in the company's entertainment budget.

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