Issues in The Merger of AOL-Time Warner
...the key differences in assessing the above issues in Europe and America was the online distribution of movies, services like instant messaging or access to broadband networks of the future. In Europe the merged company would not be able to dominate the market because Time Warner does not own any cable networks and AOL does not rank higher than being the second-largest online service in any individual European country. In the American trading bloc this new merged company could dominate the market. The New York-based Time Warner, the world’s largest media and entertainment company, produces television, movies, music, and magazines. The company owns CNN, HBO, the Cartoon Network; magazines like Time, People, Fortune, and Sports Illustrated; and the Warner Brothers movie, television, and music studios. Combine AOL with Time Warner and you will have a company that can dominate the American trading bloc. America Online, based in Virginia, is America’s largest online service provider. More significantly, the Time Warner-America Online merger created the first Internet provider capable of distributing its own music and entertainment over its own distribution network. In order to protect the consumers from paying to much for a certain product or service and also making sure that smaller companies can enter the market, both the United States and Europe have established antitrust acts. In order to stop this new company from monopolizing the Internet and entertainment market in America, The Federal Communications Commission (FCC) stated that the merged company must open up AOL’s popular instant messaging service to other providers over Time Warner’s cable lines. Furthermore, this new company must not keep consumers from using an Internet service provider other than AOL. To protect consumer choice, The Federal Trade Commission (FTC) stated that the new company must allow customers to choose from among three Internet service providers aside from AOL within three months of offering service in any particular market. In order to comply with the FTC’s requirements, Time Warner made a deal to carry Internet service provider EarthLink, one of AOL’s main competitors, over it’s high-speed cable lines. In Europe, the EC made sure the AOL-Time Warner did not dominate the Internet a...