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AT&T-Time Warner Merger Case Politically Motivated

AT&T-Time Warner Merger Case Politically MotivatedAT&T-Time Warner Merger Case Politically Motivated

The US Justice Department’s lawsuit to block AT&T’s $85 billion acquisition of Time Warner seems more like a detour than a permanent shift in the federal government’s antitrust strategy.

The lawsuit, filed Monday in a D.C. federal court, had many lawyers and antitrust scholars wondering about the government’s case. It hasn’t successfully blocked a vertical deal like this in several decades, lawyers noted. And this time it appears to be partly politically motivated, CNBC reported.

President Donald Trump has made no secret of his disdain for CNN, Time Warner’s cable news channel that he has frequently called “fake news”. And last year on the campaign trail he promised he would not approve the AT&T-Time Warner deal under his administration.

Reports earlier this month said the justice department was seeking a sale of Turner Broadcasting, the parent of CNN, or Time Warner’s DirectTV division to win approval of the merger.

AT&T CEO Randall Stephenson said Monday the issue of CNN was the “elephant in the room” with regard to the DOJ lawsuit but he promised to fight the government in court. In the meantime, he said, the action “throws a great deal of uncertainty on anyone contemplating M&A.”

Lawyers said Tuesday that regulators typically don’t scrutinize vertical deals, which put different types of businesses that don’t compete with each other under one roof. In this case, AT&T is the distribution network while Time Warner creates television shows and movies that get distributed on networks.

 

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