Professor Timothy Wu of Columbia University is one of the most recognizable voices in modern antitrust law. But Wu is a proponent of left-wing economic and political views. He believes that American markets are rigged by a handful of dominant firms.
He is wrong.
Unfortunately, Wu is influential. He just wrote an opinion piece for the New York Times, in which he opines that antitrust law would be violated if either Netflix or Paramount were able to buy Warner Bros. Discovery. He cites various reasons, including competition policy, cultural issues, and possible job losses. But Wu is also wrong on antitrust law.
America’s antitrust laws were never built to guarantee a particular market structure. They were built to promote economic efficiency and maximize consumer welfare. For over 40 years, the Supreme Court has applied the standard of economic efficiency and consumer welfare when considering monopoly issues. In no small part, the success of the American economy, especially in the areas of technology and entertainment, is a consequence of the Supreme Court’s view of antitrust law. Big can be beautiful. Big can be competitive. Witness the intense competition among the largest technology companies in the U.S. in the area of artificial intelligence. The largest U.S. companies will invest up to $400 billion in 2026 in the quest to be No. 1 in AI.
On the matter of the fight for Warner Bros. Discovery, Wu is wrong about the appropriate market. Netflix, Paramount, and Warner Bros. are all competing for viewers’ eyeballs. They compete against Alphabet Google’s YouTube, against Amazon Prime, and against Instagram. The Supreme Court has consistently ruled that an economic monopoly does not exist when a company’s market share is below 70%. If Netflix were to acquire Warner Bros., its market share of viewers would be well below 50%. If Paramount were to acquire Warner Bros., its market share would be even lower.
Under current antitrust law, America’s monopoly laws are not relevant to the Warner Bros. transaction.
Moreover, antitrust law does not concern itself with culture, with vague ideas about humanism, or with whether jobs are lost or created. Remember, creative destruction is an essential component of American capitalism. When jobs are lost due to technological or consumer demand changes, for example, other jobs are created. This is American dynamism.
Another problem Wu routinely makes is that he mistakes size for power. He believes that big companies exercise pricing power. This is wrong. A recent National Bureau of Economic Research paper says that large companies do not engage in excessive markups. In addition, any consumer knows that Walmart competes aggressively on price against Amazon, against Costco, against Target, and against supermarkets across the nation. Walmart is large, but it cannot force shoppers to purchase. In the same way, Apple is large, yet half of smartphone users choose Android. Scale is not the same as abuse of pricing power. Antitrust law always requires proof of actual harm to consumers. Wu often skips this step.
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Another Wu blind spot is innovation. Many of the mergers he has opposed are transactions that increased technological innovation. Arguably, without the capital and distribution power of Meta, products such as WhatsApp and Instagram would have died in obscurity.
Most importantly, for the U.S. to compete in the existential competition with China regarding AI, the U.S. must rely on the technological innovation and capital resources of America’s hyperscalers: the largest U.S. technology companies. Because of America’s dominant firms, the U.S. will invest up to 10 times more in AI in 2026 than China will. The U.S. is ahead in AI because of big tech.
Big is beautiful.
James Rogan is a former U.S. foreign service officer who later worked in finance and law for 30 years. He publishes a daily Substack on financial markets, politics, and society. He can be followed on X and reached at [email protected].
