AOL-Time Warner $164 Billion Merger Creates Largest Media Conglomerate in History

America Online (AOL), the nation’s dominant Internet service provider, announces its intention to purchase Time Warner for $164 billion in the largest media merger in history. The combined entity would control magazines, video and high-speed Internet cable, cable TV channels (including CNN, HBO, TBS), music labels (Warner Music), film studios (Warner Bros.), and TV/movie production companies, giving unprecedented control over media content creation and distribution channels.

The merger was made possible by the 1996 Telecommunications Act’s elimination of cross-ownership restrictions that had previously prevented this level of vertical and horizontal integration. Consumer groups and critics warned that the merged companies would have excessive control over the nation’s media content and infrastructure, potentially discriminating against competing content providers and limiting consumer choice. The FTC and FCC approved the merger with conditions, but enforcement proved minimal.

The AOL-Time Warner merger exemplified the Telecommunications Act’s failure to promote competition. Instead of the promised era where “anyone could enter any communications business,” deregulation enabled a handful of corporations to dominate entire media sectors. By 2005, just six corporations - Viacom, News Corporation, Comcast, CBS, Time Warner, and Disney - controlled more than 90 percent of American media. The merger ultimately failed commercially, but its approval demonstrated how thoroughly the 1996 Act had transformed media regulation from limiting concentration to facilitating it, with devastating consequences for diversity of voices, local journalism, and democratic discourse.