Media consolidation is the concentration of ownership of our news sources into the hands of fewer and fewer corporations. As consumers, we have a right to choose what companies to buy from and support, but what do you do when they are all owned by the same company. Our choice is taken away from us. Unfortunately, that is our reality today; six companies own 90% of all media. Only six companies. In 1983 90% of all media was owned by 50 companies, an 88% decrease. The six companies that control 90% of all media are; Comcast, Walt Disney, AT&T, ViacomCBS, Sony, and Fox.
The Telecommunications Act of 1996, passed by Bill Clinton, reduced regulations on ownership of multiple media production companies. This act amended the Communications Act of 1934; these two laws are the only laws that regulate the telecommunication business. The Telecommunications Act was passed because it was said that it would create more competition in the industry. In reality, it created less diversity which in turn created higher prices. For example, before 1996, IHeartRadio owned 40 radio stations; today, they own 1,240 stations, a 30% increase. When the Telecommunications Act was passed in 1996, there were 20 million users in the US. Today there are 298 million users.
Vertical integration is the combination in one company of two or more stages of production normally operated by separate companies. For example, originally, Ikea would buy materials for their products from another distributor; as a company, they could choose who to buy from. In 2015 Ikea bought an 83,000-acre forest so they could supply themselves their own materials without buying from another company. This strategy allows one company to control the distribution chain rather than multiple companies involved in the distribution process. With vertical integration, companies can control the market. The main driving factor behind the US economy is supply and demand. It is how our country runs its market. Vertical integration harms the free market.
Some companies have tried to take advantage of expanding their ownership. Ford Motor Co. tried to buy out a company called Autolite that made spark plugs. However, that expansion was denied by the Supreme Court in 1972 because it was said that they would have too much market control and stop other competitors from entering the market. In 1989 Panasonic had to give back 16 million dollars in sales because they charged consumers 5-10% more because of price-fixing.
Both media consolidation and vertical integration allow companies to have monopolies. The Sherman Anti-Trust Act was passed in 1890, and it was put in place to ban monopolies. They banned monopolies because it took away the consumer's choice of making purchases from different companies. Monopolies have no competition, which allows them to control prices. Our media has no diversity has had and will continue to have harmful effects in our country.
We have an illusion of choice. Media consolidation and vertical integration are spinning out of control with almost zero government regulations. The big six corporations can silence opposing viewpoints, change prices to however they see fit, prioritize advertisements, and spread true or false information they want to the general public.
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