22 Aug 2026 Horace Cooper: Paramount-Warner Merger Fight Reveals U.S. Policy Lags Behind EU
“The biggest merger decisions in the country increasingly are made not by the expert agencies that Congress built for the job, but in whichever courthouse a group of attorneys general happens to choose,” writes Horace Cooper, a former constitutional law professor who now serves as both Project 21 chairman and a senior fellow with the National Center for Public Policy Research.
In a commentary published at Bloomberg Law, Horace writes:
The message that investors and corporate leadership are receiving is that America isn’t a haven for capital transactions. Federal clearance, which should be the last hurdle, seemingly is now the first step, and the process is going to take far longer, and cost far more, than it should.
The problem is that the actions of these state attorneys general aren’t serving a useful purpose as a check against federal power; instead, they’re potentially deterring other U.S. investments.
Read Horace’s entire commentary below.
Capital markets can seem complicated, but always remember that capital consistently seeks out jurisdictions where the rules are certain. Unfortunately, the U.S. may no longer be the top jurisdiction in that regard thanks to the latest developments with Paramount’s planned acquisition of Warner Bros. Discovery.
Horace Cooper
The U.S. Justice Department spent eight months reviewing more than two million documents and concluded that that allowing the merger/acquisition would actually increase competition. The DOJ closed its investigation without finding any violation that would warrant imposing conditions.
Yet, weeks later, a dozen state attorneys general sued to block the deal, and now the largest corporate marriage in Hollywood history is frozen until as late as mid-2027. Workers are in limbo, shareholders are watching value erode, and both companies are paying the price for delay.
The most likely outcome is that Paramount wins on the merits and eventually closes the deal. But set aside the specifics of this particular merger. The message that investors and corporate leadership are receiving is that America isn’t a haven for capital transactions. Federal clearance, which should be the last hurdle, seemingly is now the first step, and the process is going to take far longer, and cost far more, than it should.
The problem is that the actions of these state attorneys general aren’t serving a useful purpose as a check against federal power; instead, they’re potentially deterring other U.S. investments.
The plaintiff states are applying a theory of national harm, claiming the merger would cause “substantial harm on movie theaters, basic cable distributors and, ultimately, audiences nationwide.” When the alleged harm is national, allowing one coalition of states to veto what federal enforcers already approved is no safeguard. It hands national economic policy to the lowest common denominator of politicians who face election-year pressure to pick high-profile partisan fights.
The practical result is that the biggest merger decisions in the country increasingly are made not by the expert agencies that Congress built for the job, but in whichever courthouse a group of attorneys general happens to choose.
On mergers and acquisitions, the European Union — hardly known for light-touch regulation — is ahead of the U.S. If a transaction is reviewable in three or more member countries, it goes to the European Commission, and member countries are barred from conducting their own competing reviews. When this policy was put in place, 27 countries recognized that certainty requires a single decision-maker.
As it happens, the European Commission already reviewed and approved the Paramount-Warner merger. It found ample competition would remain and rejected the concerns and market definitions now being raised by a handful of state attorneys general. So did Australia. So did our own Justice Department.
A German regulator can’t second-guess Brussels on this deal, but the California attorney general seems to think they can second-guess Washington. This means, at least in the short run on merger policy, the U.S. is now less predictable than the EU.
Congress should examine adopting a preemption structure like the European rule. Under such a structure, if a transaction substantially affects five or more states, review goes automatically and exclusively to the Justice Department or Federal Trade Commission — the two agencies tasked by statute to enforce federal antitrust laws. In that case, the states themselves would be barred from acting.
Such preemption wouldn’t weaken enforcement. The DOJ and FTC would keep every tool they have today, and states would maintain their traditional role over genuinely local matters. What this would do is put a stop to double jeopardy for deals the federal government has already scrutinized and cleared.
This isn’t a partisan point. State coalitions of both parties have re-litigated federal merger decisions, and whoever holds the White House next will face the same problem in reverse.
The U.S. invented modern antitrust and shouldn’t be outclassed at administering it. The Clayton Act was written to protect competition, not to give 12 state officials a second look over decisions the federal government already made. A country that wants to lead the world in attracting capital can’t tell investors that “clearance” is a suggestion.
Policymakers should consider ways to fix the system now, before the next $100 billion reminder that, in America, no deal is ever really done.
Horace Cooper is a senior fellow with the National Center for Public Policy Research, chairman of the Project 21 National Advisory Board and a legal commentator. This first appeared at Bloomberg Law.