I spent decades as a telecom beat reporter watching the mainstream press cover the telecom industry. I had a front row seat to the endless promises big telecoms like AT&T and Comcast made before a merger, and the way the U.S. business press repeatedly parroted pre-merger claims entirely unskeptically, without pointing out the harms of consolidation, layoffs, or that pre-merger promises are broadly meaningless.
Big companies promoting terrible mergers that cause untold layoffs and consumer and market harms — while promising none of that will actually happen — is a proud, fifty-plus year American tradition. And it requires a symbiosis with lazy, (not-coincidentally also highly consolidated) major media empires.
Case in point: grocery giants Kroger and Albertsons are floating a $24.6 billion merger that regulators have been justifiably skeptical about. Experts who study grocery consolidation for a living all indicate that, just like most major mergers, the deal will likely harm consumers and workers alike. States and the FTC have sued Kroger, and Kroger countersued the FTC, claiming antitrust enforcement is “unconstitutional.”
Kroger (and tell me if you’ve heard this one before) is pinky swearing that increased consolidation in the already consolidated grocery space will increase jobs, boost competition, and lower prices for consumers. On that last point, the company this week told the press that if the merger is approved, they’ll dole out $1 billion in immediate savings to consumers.
The promise is baseless. As you see in tech and telecom, pre-merger promises are utterly valueless. U.S. regulatory enforcement of merger promises is completely feckless, and getting weaker in the wake of major Supreme Court rulings. Antitrust academics insist there’s nothing in the promise that’s worth anything. And yet Bloomberg, Reuters, and CNBC all parroted the claim mindlessly:
Not a single one of the news reports took the time to speak to a single antitrust academic or expert, who’d be quick to point out the promise isn’t real. There are people, surprisingly enough, who’ve spent their entire lives studying consolidation in grocery markets, but they’re rarely quoted by major business journalism outlets whose job, purportedly, is to convey the truth to the U.S. public.
One local Boise outlet, BoiseDev, actually crunched the numbers, and found that even if Kroger followed through on the promised price cuts (which again they wouldn’t, because that’s not how consolidation works), they’d amount to about four cents per store visit per consumer.
Several Senators and State AGs have expressed concerned that the one-two punch of consolidation (read: less competition), fused with new dynamic store-shelf display tag pricing tech, could make it easier than ever to screw consumers. Combine that with a Supreme Court regulatory assault on regulatory oversight of, well, everything, and the potential harms to Americans become rather clear.
I don’t mean to wander outside of our beat into grocery news, but the treatment of the merger by major outlets is a perfect demonstration of the U.S. press’ complete failure to fully, accurately report on corporate behavior and its real-world impact. Most U.S. business journalism isn’t journalism, so much as a weird fan fiction that tells investors, executives, and media owners precisely what they want to hear.
It’s a world where history doesn’t exist, academic antitrust expertise doesn’t exist, real-world consumer and labor harms are downplayed or ignored, and executive statements are almost always taken at face value, even if the executive has a long-history of lies. The coverage broadly reflects the anti-regulation, anti-consumer, anti-labor, shot-term profit seeking interests of center-right billionaire ownership. The same ownership, that, again, not coincidentally owns what’s left of mainstream U.S. journalism.
And it’s more broadly reflective of any serious interest in antitrust reform. When the GOP was looking to bully tech giants away from moderating racist political propaganda, the press also mindlessly bought their claim they were “suddenly very serious about antitrust reform,” despite the fact, with their other hand, they were stocking the courts with folks utterly dedicated to making such reform impossible.
