DOJ poised to sue AT&T to stop Time Warner merger

DOJ poised to sue AT&T to stop Time Warner merger

But considered on its merits, it could mark a significant departure in antitrust policy, one that might block or modify a broader set of mergers found to harm consumers. The department, however, denies political interference.

The DOJ's hesitance to give it the green light had been apparent for months, but the reason for its resistance - specifically, whether it has anything to do with President Trump's well-documented hatred of CNN, which is owned by Time Warner - remains a subject of intrigue. On Tuesday, Trump called the deal "not good for the country" and said he thought it would cause prices to go up. White House spokeswoman Sarah Huckabee Sanders said Monday she wasn't aware of any specific action related to the case taken by the White House.

AT&T and Time Warner execs originally pitched the deal as a way to build a stronger rival to the major platforms companies like Google, Facebook and Amazon, which are gobbling up a growing share of programming and have drastically altered distribution models.

To prevent Comcast from abusing its greater leverage, regulators imposed a host of conditions on the company. The company could also increase prices on subscription services like HBO. Complaints in the past have dragged on for years.

Stephenson said the deal had "the whole world" questioning what the justice department "can and cannot do". Its plan is to marry popular Time Warner networks with its nationwide wireless and television services in order to build a data-driven ad business on top of it all. "It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy", Delrahim said.

The Justice Department is supposed to operate independently in the executive branch, though, leading even critics of the AT&T/TW merger like Sen.

That latter charge - the suggestion that a vertical merger could impede newer competition from online video distributors - is a place the government has never gone before. This mirrors AT&T's bid, because it would involve the acquisition of studio businesses as well as cable channels.

Wall Street has expressed increasing doubts about AT&T closing the Time Warner acquisition, with the latter's shares falling 15 percent in less than a month. "It is simply not the case that this is a "novel" legal theory".

"Vertical" mergers that combine companies in two different industries (AT&T is considered a telecom company and Time Warner is a content provider) are seen as less of an antitrust threat than "horizontal" mergers that combine two competing companies (such as AT&T's unsuccessful attempt to purchase T-Mobile). "Rather, it bears the burden of proving to the U.S. District Court that the transaction violates the law". "We are confident that the Court will reject the Government's claims and permit this merger under longstanding legal precedent", McAtee said. But that depends on whether other considerations played a role. Subsequent reports from Reuters and Politico confirmed the news. "If this represents a change of heart, to be much more aggressive against mergers, it would be a game changer".

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