What's Wrong With the DOJ Stance on AT&T/ Time Warner Merger
It strains credibility to believe that team Trump, so overwhelmingly anti-regulatory in every other way, is embracing aggressive antitrust enforcement out of sincere conviction.
November 10, 2017 at 08:22 PM
12 minute read
So let's get this straight: The Trump administration is perfectly willing to gut environmental protection rules, relax healthcare oversight, take away consumer rights, kill net neutrality and dismantle labor laws. But when it comes to antitrust, they're hyper-aggressive enforcers?
What a joke. Makan Delrahim should be ashamed.
Multiple media outlets have reported that the Justice Department may oppose AT&T's $85.4 billion acquisition of Time Warner, which just so happens to own “fake news” CNN.
There are certainly good reasons to oppose the deal, but they're reasons mainly expressed by groups such as the Consumer Federation of America and Free Press, and Senate Democrats like Al Franken and Elizabeth Warren.
Because it's a vertical merger. And most of the time, the government hasn't done much to limit vertical mergers—ones where the combining companies are not direct competitors and whose assets don't overlap.
The Antitrust Division under President Barack Obama was hardly a pushover, on average opposing more than 50 mergers per year. Nonetheless, on Obama's watch the feds greenlighted vertical unions including Comcast/ NBC Universal; AT&T/DirecTV; Google/ITA; and Verizon/Yahoo.
Are we seriously supposed to believe the Trump administration is more concerned about vertical restraints on competition? That they want to push the boundaries of antitrust enforcement because they just care so darn much about protecting consumers and the marketplace for free speech?
(The Federal Communications Commission, which reviews certain mergers to determine if they are in the public interest, is not involved this time because the deal doesn't involve the transfer of airwave licenses.)
Look, everyone knows Trump hates CNN. He reminds us of this constantly. And lo and behold, the Justice Department is reportedly asking for Time Warner to divest CNN or perhaps Turner Broadcasting as a whole to win merger approval.
It's not even clear to me how doing so would mitigate basic antitrust concerns such as the power to raise prices. But hey—it sure would stick it to CNN for daring to criticize the president.
When President Trump pardoned Sheriff Joe Arpaio, who was found guilty of criminal contempt, I wrote that it signaled a frightening disregard for the rule of law.
And so does this. The notion of using antitrust review as retaliation for reporting unfavorably on the president? That's straight out of a despot's playbook.
The good news is, the parties have balked. “I have never offered to sell CNN and have no intention of doing so,” Randall Stephenson, AT&T chairman and CEO, said Wednesday.
They're well-represented by antitrust counsel. As the acquiring party, AT&T can be expected to lead the fight. The company has tapped a team from Arnold & Porter led by Richard Rosen, and from Crowell & Moring led by Wm. Randolph Smith. Veteran antitrust lawyers, both guided AT&T through successful merger review when it purchased DirecTV.
Time Warner has turned to Cravath, Swaine & Moore, with an antitrust team that includes former DOJ antitrust chief Christine Varney, another leader of the bar.
Here's what I hope happens. I hope AT&T and Time Warner tell DOJ to go to hell. I hope they force the feds file a complaint in federal court challenging the merger. I hope it goes to trial, and I hope DOJ gets truly and embarrassingly clobbered.
I actually have genuine reservations about whether the merger will benefit the public. If the Antitrust Division under Bill Baer was opposing it, I'd root for them. Because they would have been fighting it for the right reasons.
But it strains credibility to believe that Team Trump, so overwhelmingly anti-regulatory in every other way, is embracing aggressive antitrust enforcement out of sincere conviction. No. This looks political, and that's unacceptable.
So let's get this straight: The Trump administration is perfectly willing to gut environmental protection rules, relax healthcare oversight, take away consumer rights, kill net neutrality and dismantle labor laws. But when it comes to antitrust, they're hyper-aggressive enforcers?
What a joke. Makan Delrahim should be ashamed.
Multiple media outlets have reported that the Justice Department may oppose
There are certainly good reasons to oppose the deal, but they're reasons mainly expressed by groups such as the Consumer Federation of America and Free Press, and Senate Democrats like Al Franken and Elizabeth Warren.
Because it's a vertical merger. And most of the time, the government hasn't done much to limit vertical mergers—ones where the combining companies are not direct competitors and whose assets don't overlap.
The Antitrust Division under President Barack Obama was hardly a pushover, on average opposing more than 50 mergers per year. Nonetheless, on Obama's watch the feds greenlighted vertical unions including Comcast/
Are we seriously supposed to believe the Trump administration is more concerned about vertical restraints on competition? That they want to push the boundaries of antitrust enforcement because they just care so darn much about protecting consumers and the marketplace for free speech?
(The Federal Communications Commission, which reviews certain mergers to determine if they are in the public interest, is not involved this time because the deal doesn't involve the transfer of airwave licenses.)
Look, everyone knows Trump hates CNN. He reminds us of this constantly. And lo and behold, the Justice Department is reportedly asking for Time Warner to divest CNN or perhaps Turner Broadcasting as a whole to win merger approval.
It's not even clear to me how doing so would mitigate basic antitrust concerns such as the power to raise prices. But hey—it sure would stick it to CNN for daring to criticize the president.
When President Trump pardoned Sheriff Joe Arpaio, who was found guilty of criminal contempt, I wrote that it signaled a frightening disregard for the rule of law.
And so does this. The notion of using antitrust review as retaliation for reporting unfavorably on the president? That's straight out of a despot's playbook.
The good news is, the parties have balked. “I have never offered to sell CNN and have no intention of doing so,” Randall Stephenson,
They're well-represented by antitrust counsel. As the acquiring party,
Time Warner has turned to
Here's what I hope happens. I hope
I actually have genuine reservations about whether the merger will benefit the public. If the Antitrust Division under Bill Baer was opposing it, I'd root for them. Because they would have been fighting it for the right reasons.
But it strains credibility to believe that Team Trump, so overwhelmingly anti-regulatory in every other way, is embracing aggressive antitrust enforcement out of sincere conviction. No. This looks political, and that's unacceptable.
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