Opinion

Nicholas Wapshott

The analogue titans’ last gasp against the digital giants

Nicholas Wapshott
Aug 4, 2014 18:46 UTC

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.

There is no such clarity now. The digital revolution has so upset every aspect of business that the old certainties appear no longer to apply. The Justice Department is left on the sidelines, anxious not to impose an inappropriate remedy on the market.

Rupert Murdoch’s troubles are far from over

Nicholas Wapshott
Jul 1, 2014 06:00 UTC

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.

With convictions secured in Britain for bribing public officials, there is already enough evidence for U.S. authorities to pursue News Corp. under the Foreign Corrupt Practices Act. Which may be why the FBI requisitioned 80,000 emails from News Corp.’s New York headquarters.

Christie and Murdoch are following similar paths

Nicholas Wapshott
Jan 21, 2014 16:33 UTC

The problem with Chris Christie, it seems, is not so much that he is a political bully who quickly turns to vindictiveness and retribution when he doesn’t get his own way. It is that our politics have been so “feminized” that the sort of manly, aggressive, healthy pugilism that Christie indulges in with his political enemies is widely considered a weakness rather than an expression of his depth of character.

There are other reasons Americans have not lifted Christie to their shoulders on learning that his people were behind the four days of jams on the George Washington Bridge to punish the Fort Lee residents for electing a Democrat. Christie simply cannot get a fair hearing on Bridgegate so long as the press refuses to acknowledge Hillary Clinton’s part in the murder of Ambassador Stephens in Benghazi.

That eccentric account of Christie’s current scandal-ridden dilemma is the view from Fox News, presided over by Roger Ailes and Rupert Murdoch, both of whom appear to see in Christie a kindred spirit. Both believe Christie’s rough-and-tumble approach to politics and his devil-may-care attitude to his opponents, as well as the handling of his chronic obesity, show a genius for retail politics that few other Republican wannabes can match. Christie is the opposite of Willard “Mitt” Romney, whose smooth looks and awkward, alien manner caused the testosterone-fueled Murdoch and Ailes to blanch.

Contemplating life after Murdoch

Nicholas Wapshott
Jul 10, 2013 16:14 UTC

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.

Little noticed in accounts of the secretly recorded conversation, an editor said Murdoch’s promises were all very well but asked him what guarantees they would have of being reinstated if he was no longer around, i.e. if Murdoch was dead?

The crumbling of the Murdoch dynasty

Nicholas Wapshott
Dec 4, 2012 22:59 UTC
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.

To stem the damage being done to his company’s profit centers, and to appease one of his biggest sleeping shareholders, Saudi Prince Alwaleed bin Talal, Murdoch closed the News of the World, the scandal rag he used to intimidate those who did not toe his line, and he lost his chief executive in London, Rebekah Brooks, who awaits trial for interfering with the course of justice, among other charges. Almost all the other 86 arrested so far, except those they are accused of bribing, are former Murdoch employees.

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