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DOJ to Waxman: Violating Net Neutrality Isn’t Anticompetitive

Congressman Waxman shares that the news that the DOJ Antitrust Division told him that cable or phone companies violating net neutrality principles with exclusive or discriminatory deals are not violating the antitrust laws:

Waxman said during a net neutrality hearing Wednesday that Justice officials informed his office that existing competition laws cannot be used to prevent cable and phone companies from blocking Web traffic.

“DoJ told us that … antitrust does not stop a phone or cable company from blocking websites that don’t pay for access,” said Waxman, the top Democrat on the Energy and Commerce Committee.

“According to DoJ, favoring websites that pay high fees and degrading websites that don’t is perfectly legal under the antitrust laws as long as the phone or cable company isn’t in direct competition with the websites being degraded.”

Of course, if a monopolist engages in activity that amounted to exclusionary conduct and threatened consumer welfare, it certainly would be within the domain of antitrust enforcement.  Thus,  this sounds more like the DOJ asserting that business conduct violating net neutrality principles isn’t an antitrust problem because there is no harm to competition.   In other words, the DOJ is free to enforce the antitrust laws against the anticompetitive behavior, i.e. conduct characterized by the exercise, maintenance or acquisition of monopoly power to the detriment of consumers; what they cannot do is enforce those laws against behavior that is not anticompetitive.

I’m quite sure that is not the message Waxman intended to send.

Proponents of net neutrality are certainly free to (and in fact do) argue that net neutrality is justified on other (non-consumer welfare) grounds or even at the cost of reducing consumer welfare.   But many net neutrality arguments are framed in terms of precisely the types of competitive harms that would be actionable under the antitrust laws if there were proof.    It strikes me that the minimal discipline imposed by antitrust  in requiring some proof that consumers might be harmed would provide at least some safeguard against regulation might impose substantial welfare losses for consumers.

Filed under: antitrust, net neutrality, technology