Here we go, AT&T and Time Warner were slated to merge in a years long deal, but now the Trump administration will likely put an end to it just short of the finish line.
President Trump’s administration has declared and President Trump himself has repeatedly declared, that the merger will end in a concentration of power that will be detrimental to the United States at large.
With this declaration, the government is seeking to block the merger on antitrust grounds:
The Justice Department is arguing that AT&T would use Time Warner’s films and movies to force rival pay-TV companies to pay “hundreds of millions of dollars more per year for Time Warner’s networks” in the lawsuit filed late Monday in federal court in Washington.
The government cited documents where AT&T and its satellite broadcast unit DirecTV described the traditional pay-TV model as a “cash cow” and “golden goose,” suggesting customers were at risk of price hikes.
The 23-page complaint also said the deal would slow the industry’s transition to online video and other new distribution models.
They have asked that AT&T spin off DirecTV and their Turner Broadcasting division, that houses the much maligned CNN network. CNN has been on the receiving end of many fake news criticisms by the president and his allies, along with media watchdog groups.
CNN has been the center of many controversies over the past year. Its most infamous controversy happened earlier this year when the network began harassing and threatening blackmail against an anonymous internet user over a GIF he created (a repeating, moving picture) that showed the network in a negative light. This resulted in a massive backlash against the network that even Sparta Report took part in:
Now AT&T says it will fight the Trump administration in court and used past precedence of the same type of “vertical mergers” of companies “on different steps in a supply chain.” They pointed to the Obama administration allowing Comcast to merge with NBCUniversal as reason for their merger to be allowed to continue.
Unfortunately for them, with the change in administrations comes the change in policy:
AT&T, which sees the deal as a way to compete against emerging technology companies such as Netflix Inc and Amazon.com Inc’s Prime Video, described the lawsuit as ”a radical and inexplicable departure from decades of antitrust precedent.”
AT&T head lawyer David McAtee said vertical mergers, between companies on different steps in a supply chain, are routinely approved.
”We see no legitimate reason for our merger to be treated differently,” said McAtee, adding that AT&T is confident a judge will reject the Justice Department’s case. The Obama administration approved a similar vertical deal in 2011 to allow cable company Comcast Corp to acquire NBCUniversal.