As Democrats rushed to rally support for Kamala Harris, two prominent megadonors openly challenged a central aspect of Joe Biden's agenda to curb corporate power. This move could create significant division within the party if Donald Trump is defeated in November. On July 25, LinkedIn co-founder Reid Hoffman appeared on CNN, urging the vice president, if elected, to remove Federal Trade Commission chair Lina Khan.
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| Illustration by Victor Kerlow |
Hoffman claimed that Khan was acting "outside the scope" of her role. "Antitrust is fine," said Hoffman, who has donated $7 million to a Democratic super PAC and serves on the board of Microsoft, a tech giant whose acquisition of Activision was challenged by the FTC. "Waging war is not."
A day later, IAC media mogul and former Ticketmaster chair Barry Diller provided further insight into corporate America's view on merger regulation under Khan. When asked on CNBC if he would lobby Harris to replace her, he responded, "Yeah, I would. I think she’s a dope." This comment reflects the dissatisfaction among Wall Street and Silicon Valley regarding increased scrutiny of mergers and acquisitions over the past four years.
This issue has divided Hollywood's unions and studios, particularly concerning media consolidation. Operating quietly within this division are Hollywood lobbyists, who have been actively engaging lawmakers amid a contentious debate that could influence the next administration and shape the industry's future.
In candid discussions with Morfeli Reporter, representatives involved in the lobbying efforts of writers, directors, producers, and actors expressed concerns about the state of competition in Hollywood. At the forefront of their worries are tech giants that blur the lines between studios and distributors, encroaching upon the industry.
Recently, the Directors Guild met with the antitrust division of the Justice Department, led by Jonathan Kanter, another target of criticism by some wealthy, M&A-friendly Democrats. “We’re concerned,” said DGA executive director Russell Hollander. “For some reason, antitrust has not applied to the tech companies.”
Between 2009 and 2020, the media and consumer telecommunications sectors witnessed more than $400 billion in megamergers. Five major transactions significantly contributed to this figure: Comcast and NBCUniversal (2011), AT&T and DirecTV (2015), AT&T and Time Warner (2018), Charter, Time Warner Cable and Bright House (2016), and Disney and Fox (2018).
The Writers Guild has noted that this wave of consolidation and deregulation has weakened the leverage of talent. Producers, who have experienced reductions in profit participation and salaries during negotiations with studios that increasingly distribute their own content, share similar frustrations.
In response, the Producers Guild has established an internal task force to examine competition issues within the industry, according to sources familiar with the matter. Additionally, the guild hosted a discussion with antitrust activist Matt Stoller, led by president Donald De Line, which included representatives from other guilds and unions.
Some groups, particularly the Writers Guild of America (WGA), have been advocating for a revival of a modified version of the Financial Interest and Syndication Rules. These rules were designed to prevent major TV networks from monopolizing the broadcast market by prohibiting them from owning the content they aired during primetime. They were abolished in 1993 following a deregulation push initiated by then-President Ronald Reagan.
Laura Blum-Smith, the WGA West’s director of research and public policy, emphasized, “We have and continue to call for that type of action in our industry. These are the kinds of conditions where the government has previously intervened.”
For unions, which have long supported Biden, antitrust issues are seen as a way to address labor concerns. Last year, the WGA and SAG-AFTRA supported changes to merger guidelines that consider the impact of deals on working conditions and welcomed FTC Chair Lina Khan to their picket lines during their strike.
Unions are likely to play a crucial role in deciding Khan's fate and how Kamala Harris responds to potential shifts away from Biden’s populist policies. A move away from the administration’s antitrust stance towards accommodating big-money interests could negatively impact Harris’s support among labor unions.
Guilds have valid reasons for concern. Kamala Harris’s inner circle includes influential figures such as her sister Maya Harris, whose husband, Tony West, is a notable Silicon Valley fundraiser and was involved in Uber’s anti-labor campaign.
Eric Holder, who represents corporations at Covington & Burling and is also vetting Harris’s vice-presidential pick, and Karen Dunn, an Obama administration alum with connections to Google, Amazon, and Apple, are also part of her team. Financial Times reported on July 27 that unnamed “outside campaign advisors” for Harris have suggested the possibility of scaling back competition enforcement.
The Motion Picture Association (MPA), which represents the studios, has had disagreements with Hollywood’s unions and guilds over antitrust and labor issues. In June, the MPA told the Federal Communications Commission that competition in the market remains strong. Warner Bros.
Discovery, one of its members, has been focusing on electing a president who favors business interests. WBD’s CEO, David Zaslav, has expressed a desire for deregulation to allow for consolidation, stating to Bloomberg that companies need the freedom to merge and improve. With WBD’s two-year lockup period ending, any major merger would likely face legal challenges from competition regulators unless there is a shift in enforcement policies.
The question of whether Trump would adopt a more lenient approach to merger enforcement has become a notable discussion point. J.D. Vance, Trump’s running mate, has previously diverged from his Republican peers by supporting Lina Khan, whom he praised in February for doing a good job.
It’s worth noting that Trump’s Justice Department was involved in a landmark case to block AT&T’s $85 billion acquisition of Time Warner, marking the first challenge to a vertical merger in over 40 years.
As influential figures like Hoffman and Diller work to sway Harris’s policy stance, Hollywood unions and studios may intensify their efforts to use their political influence to shape merger enforcement policies.
Both sides are anxious about the potential shift in policy. “Under this administration, the FTC is making bold moves,” says SAG-AFTRA general counsel Jeffrey Bennett. “Will we see the same approach under a different administration? I don’t know. It could change everything.”
