First, AOL and Time Warner announced their intention to
combine. Then came Time Warner/ EMI and Tribune / Times Mirror. Even more
significant, however, has been the speculation that these mergers have caused.
If these transactions are consummated, a large number of additional media
mergers are expected. There is even the possibility of a nightmare scenario- a
wave of media mergers so large that within a decade most of our information
will be supplied by perhaps six of these huge conglomerates and a fringe of
much smaller firms.
It’s time to ask two critical questions. Is this kind of
media oligopoly what we, as a society, want? And if not, can the antitrust laws
effectively prevent the threatened merger wave? The answer t the first question
is clear. We do not want a media oligopoly. The answer to the second question,
however, is far less certain. We should distrust a media oligopoly because it
would give undue control to a small number of individuals. This need not
manifest itself in a price rise for the daily newspaper or AOL’s monthly fee.
Rather, it could consist of a change in editorial viewpoints a shift n the
relative prominence of links to certain websites or a decision not to cover
certain topics, because they are not “newsworthy”. These problems could exist
without any improper intent on the part of the media barons. Even if they try
to be fair and objective, they will necessarily bring their own worldview to
the job. And in time, some of these conglomerates may be controlled by people
who are to fair or objective.
At first it might appear that the antitrust laws are of
little help in grappling with the issues presented by large media mergers. The
anti- merger laws are commonly understood as protecting price competition and a
relatively small number of firms- to greatly oversimplify let’s say at most
half a dozen – are normally though to be enough to keep a market price –competitive . In industry after industry,
firms merge until there is only a handful left, and the antitrust enforcers are
normally unable to do anything to prevent this.
(In former years mergers were governed by an “incipiency “standard that
prevented mergers and merger wave’s well before they would have led to very
large or likely anti- competitive problems.) Even if a handful of firms are
enough to ensure effective competition in most industries, would six
conglomerate media firms be sufficient for the diversity of viewpoints
necessary to democracy? Would we be reassured if they could somehow guarantee
that they would sell their magazines and internet advertisements at competitive
prices?
I am hopeful that the antitrust laws, if correctly and
vigorously interpreted are adaptable enough to meet this challenge. This is
because antitrust is not exclusively about price. It is essentially about
choice- about giving consumers a competitive range of options in the
marketplace so that they can make their own, effective selection from the
market’s offerings. Consumers should be able to make their choice along any
dimension important to them- including price, variety and editorial viewpoint.
Competition in terms of editorial viewpoint or gate-keeping
can be guaranteed only by ensuring
that a media market contains a
significantly larger number of firms than is required for price competition in
other, more conventional markets .it is unclear, however, whether this
interpretation of the anti-trust laws will be applied by the enforcement
agencies and the courts. What is needed therefore is a much more careful look
at the challenges that will be raised by future media mergers.
1.
A wave of media mergers could
A.
Be a threat to democracy
B.
Result in limiting editorial viewpoints
C.
Result in misuse of certain laws
D.
Both (A) and (B)
2.
According to the passage what could be the most
significant outcome of media oligopoly?
A.
An
increase in the cost of newspapers
B.
The fact that in the long run, there will be a
shift of power to people who might not be balanced and fair in the way they
deal with the media
C.
Certain websites may get more prominence than
others
D.
There will be no competition among the
newspapers
3.
Which of the following statements, according to
the author, are true?
a.
Half a dozen firms are enough to keep the market
price – competitive
b.
Half a dozen companies are not enough to provide
a democratic media
c.
Enforcement agencies may not interpret the anti-
trust laws correctly
d.
Half a dozen companies will be inadequate to
meet the consumer demand for product diversity
A.
A ,b
B.
A, b, c
C.
A, b, c, d
D.
B, c, d
4.
The current anti- trust laws
A.
Are not sufficient to deal with issues relating
to large scale media mergers
B.
Can prevent mergers form happening
C.
Will be effective if properly interpreted
D.
Favour a particular company or group of
companies
5.
To get a clear picture of the challenges posed
by media mergers, the author recommends:
A.
Creation of strict laws
B.
Strengthening the enforcement agencies
C.
Creation of a study committee by the congress
D.
None of the above
Answer:
1.
D The
author talks about the necessity of diversity of viewpoints being essential for
democracy. Therefore a lack of it could be a threat to democracy. So A can be
inferred. Choice B is clearly mentioned in the passage. Choice C cannot be
inferred from the passage. Choice D is the correct answer.
2.
B in the last line of the third paragraph the
author voices the contents of choice B as the serious threat to medical
oligopoly. While the author refers to the possibility of only six
conglomerates, he uses the number six figuratively and not factually. Choice B.
3.
C in the
third paragraph, the author answers that media mergers may not results in
prices increasing. Statement (a) is mentioned. In the same paragraph, he
clearly puts forth the case that the oligopoly will not be able to provide a
democratic media. And in the sixth paragraph, the author mentions statement (C)
and (D) choice C is correct.
4.
C In the first line of the fifth paragraph,
the author mentions that the existing antitrust laws, if interpreted properly,
are adequate to meet the media merger challenge. Choice C.
5.
C The
last paragraph f the passage provides a clear suggestion choice C is correct.
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