Robert Bork, President Ronald Reagan’s Supreme Court nominee in 1987, wrote a seminal book, “The Antitrust Paradox,” which argued that it was possible for a market to go from four rivals to three and see economic competition go up.
Of course, it is possible that a price war could end with the three companies deciding to “rationalize” their pricing just the way the large airlines have. That is not a trivial issue. But many industries with three strong players — especially an industry that requires significant capital costs — turn out more competitive.
Antitrust concerns aren’t the only hurdle, either. There is another that could be just as daunting: the Committee on Foreign Investment in the United States. Because T-Mobile is controlled by its German parent, Deutsche Telekom, and Sprint is controlled by Japan’s SoftBank, it is possible that the committee could claim that a merger poses a threat to national security. Lawmakers have raised security questions about the merger, citing connections between SoftBank and the Chinese device maker Huawei, which has been called a national security threat.
The committee has usually not blocked such deals, but the steel and aluminum tariffs demonstrate that the Trump administration has no qualms about invoking national security to intervene in the world of business.
And there is still the matter of the voice we haven’t heard.
Mr. Trump has never been shy about publicly opining on headline-grabbing mergers. He was a vocal critic of AT&T’s tie-up with Time Warner, he was a fan of Disney’s acquisition of most of 21st Century Fox’s assets, and he recently had harsh words for the government’s blocking of Sinclair Broadcasting’s deal to buy Tribune Media. (“Disgraceful!” he wrote on Twitter.)
So the president’s silence on this one has led to hushed questions among a cadre of executives, bankers, lawyers and lobbyists who have blanketed Washington this summer trying to turn the ear of regulators and policymakers: What does he actually think? And, despite the White House’s repeated insistence that Mr. Trump has no involvement in approving such deals, is he exerting any influence behind the scenes?
We will not know the president’s position until he tells us. But perhaps the most important voice we’ve heard from so far has come from the head of the Justice Department’s antitrust division, Makan Delrahim. He was asked directly in June about how many telecom companies there should be to have a competitive industry.
His answer? “I don’t think there’s any magical number that I’m smart enough to glean.”
Absent a telling tweet from the president, that is as close as we’ve heard to a position from the government. And in this case, it sounds like the right answer.
