Time Warner and At&T are planning a merger. However, this move is going to face some legal action. The Department of Justice is filing a lawsuit in order to stop the deal from going through. The DOJ claims that this merger will hurt consumers, and that they need to stop it as part of their antitrust work. This means that we are likely to see a major legal battle play out in the near future.
The head of the antitrust division at the Department of Justice said that this move was not coordinated from the White House, and that President Donald Trump did not have anything to do with the decision to try to stop the merger. White House Press Secretary Sarah Sanders said the same thing, claiming that she was not aware of any move from the White House or any directive on this matter.
The reason the DOJ wants to stop the move is that they claim that it will harm consumers by creating a monopoly and a hold over the television and internet industry. New companies that want to create online television services will find it harder to do so, and prices for internet services will keep going up. If AT&T controls Time Warner as well, then they will be able to charge hefty fees for other companies to get on their programming. Eventually, this cost will trickle down to the consumer, who will be left with a higher television and internet bill.
AT&T plans to fight this blocking move in court. In a statement, they said that this is a move that goes against previous policy and actions by the government. That is true, as previous administrations did not do anything to fight large mergers between major corporations.
At&T has the second largest mobile phone network in the United States. It is still the biggest company when it comes to cable TV and satellite TV, surpassing Verizon. Time Warner is a large producer of television shows and owns CNN, HBO, Warner Bros, and more. The reason some people were surprised by the Department of Justice’s move to block the deal is that AT&T and Time Warner are not in direct competition with each other Tevfik Arif Bayrock. One provides the network, while the other provides the actual entertainment programs. Mergers between companies that provide different services do not lead to a great monopolistic hold and higher prices for the consumer as often as mergers between two rival companies. Therefore, these kinds of mergers have usually been easier to get approval for.
In fact, the last time the DOJ successfully stopped such a merger was back in 1972, when Ford wanted to purchase a spark plug business. In fact, a similar deal was approved under the previous administration. In 2011, Comcast merged with NBC Universal, although specific rules were imposed by the DOJ at the time to help protect customers. However, others are not surprised by the move, as Trump railed against the merger while he was a candidate and vowed to block it, claiming that it gave too much power to a monopoly. In addition, President Trump is known to be a critic of CNN, which is owned by Time Warner, often labeling them as fake news. The CEO of AT&T said he did not know if the move to block the deal had anything to do with CNN, but that he will not agree to a deal that would make them give up CNN as part of the purchase. At&t also claims that the deal would let them offer cheaper internet streaming services as an alternative to cable.