DoJ launches legal bid to block AT&T's $85bn Time Warner deal

The US Justice Department has launched legal action in order to block AT&T’s proposed $85 billion acquisition of media giant Time Warner.

The department claims the merger would reduce competition and potentially lead to higher consumer prices by concentrating too much control of media properties under one company. The DoJ claimed in its complaint AT&T would have the “incentive and ability” to charge rivals “hundreds of millions of dollars more” for the right to distribute content from major Time Warner properties including HBO and CNN.

The Justice Department has previously said it prefers structural remedies, such as the divestiture of assets, over behavioural conditions which were commonly imposed under the Obama administration. That may include offloading assets such as DirecTV, owned by AT&T, or Time Warner’s Turner Broadcasting arm.

AT&T claimed the suit was a “radical and inexplicable departure” from typical antitrust practice, vowing to fight the move.

The lawsuit comes amid reports in the US that the Trump administration had challenged AT&T to sell of Time Warner’s news division CNN in order to push through the deal, claims denied by the operator’s CEO. President Trump has repeatedly criticised CNN, labelling the network “fake news”, but also opposed the deal when it was announced last October during the presidential campaign.

Attorney General Jeff Sessions last week refused to answer a House Judiciary oversight hearing question on whether the White House tried to influence the merger review, saying the Justice Department has a policy of not revealing privileged conversations.

David McAtee, senior executive vice president and general counsel at AT&T, said: “Vertical mergers like this one are routinely approved because they benefit consumers without removing any competitor from the market. We see no legitimate reason for our merger to be treated differently.

“We are confident that the Court will reject the Government’s claims and permit this merger under longstanding legal precedent.”

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree