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Feds Investigating

Magazine article Editor & Publisher

Feds Investigating

Article excerpt

Weekly swap a matter of trust

The recent deal between the two biggest alternative-weekly chains to close competing papers in Los Angeles and Cleveland is suddenly under the microscope. "There are very few antitrust cases that are completely open and shut, but the government appears to have a very clear case here," said Aaron S. Edlin, law and economics professor at the University of California at Berkeley. "If I were the parties, I would be worried."

The U.S. Department of Justice is investigating the agreement by Village Voice Media LLC and NT Media (New Times) last month that resulted in the closing of their money-losing papers in L.A. and Cleveland, the Los Angeles Times reported last week.

Edlin, an antitrust expert, compared the situation to Palmer v. BRG of Georgia (1990), in which the U.S. Supreme Court ruled that two bar- review courses broke the law by agreeing to divide their territory between Georgia and the rest of the United States.

The alt-weekly chains could have a defense if they demonstrate that splitting a market led to efficiencies. But, Edlin said, "If all the benefits derive from getting rid of the competition, then they've got a problem. …

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