News Worms
News Worms

AT&T's Time Warner takeover: justice department aims to block $85bn deal

AT&T's Time Warner takeover: justice department aims to block $85bn deal

A spokesperson called it a "radical and inexplicable departure from decades of antitrust precedent". Two years ago, it acquired DirecTV, the largest satellite TV provider, and is looking to get into the Hollywood game with Time Warner.

In the deal, AT&T seeks to vertically integrate its wireless and pay-TV capabilities with Time Warner's video content including Warner Bros. studios and cable channels such as HBO, CNN, TNT and TBS. And most recently multiple outlets have run reports that Rupert Murdoch was "working behind the scenes" to push the Trump regime into killing the deal.

Although stopping the monster media deal featured prominently in President Donald Trump's campaign rhetoric, a senior DOJ official repeatedly staved off reporters' questions about White House influence, denying it played any role in the decision to file suit in U.S. District Court for the District of Columbia. "We are confident that the Court will reject the Government's claims and permit this merger under longstanding legal precedent", McAtee said.

In a similarly structured deal, Comcast was allowed to buy NBCUniversal in 2011, albeit with conditions created to prevent Comcast from using its market leverage to hamstring competitors.

In particular, he has long nursed grudges against CNN, a Time Warner company, for unfavorable reporting that he calls 'fake news'.

The agency will reportedly announce the lawsuit on Monday afternoon.

After arriving at the Justice Department, however, Delrahim began to scrutinize the $85 billion deal more aggressively. A DOJ official, speaking on condition of anonymity in order to discuss a pending legal case, said Monday that the government is still willing to work with AT&T on "structural relief", or selling off assets.

Nevertheless, AT&T and Time Warner initially told investors they expected the deal to close quickly - particularly because it was in the hands of what they believed to be a merger-friendly, Republican-dominated Washington, D.C.

The company's strategy is in part to bundle video entertainment with its mobile phone service.

Consumer advocates and some Democratic politicians applauded the lawsuit as a blow against media consolidation. The Department of Justice has chose to go forward with a lawsuit to block the merger. Just last week, the Federal Communications Commission voted to dramatically loosen local media ownership laws, which will allow the conservative Sinclair Broadcasting to gobble up television and radio stations in the same markets.

Delrahim has argued for requiring merged companies to divest certain businesses instead of imposing post-merger requirements on them.

A deal may still be on the table if the companies are willing to sell off some assets to address antitrust concerns, according to Justice officials, who also stressed that its move to block this particular merger does not mean others won't pass muster.

The government claims that consumer cable bills will rise if the merger goes through, saying the deal would "substantially lessen competition, resulting in higher prices and less innovation for millions of Americans".


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