The US Department of Justice has filed a lawsuit to block the anticipated merger of AT&T and Time Warner this Monday. It has been speculated that The White House under Donald Trump would force the merger to go through, particularly because CNN is owned by Timer Warner, and everyone knows what Trump thinks of CNN a network often targeted by Trump, calling it (and any other network who doesnt cover his administration with praise) #FakeNews
#FraudNewsCNN #FNN pic.twitter.com/WYUnHjjUjg
Donald J. Trump (@realDonaldTrump) July 2, 2017
Trumpy shenanigans aside, a DOJ (Department of Justice) official told reports that the main concern of the merger is a potential harm to competition. Time Warner owns several content networks and companies. The combined company could abuse the merger by charging more to other distributors for Time Warners content (HBO + Warner Bros.) which puts DirecTV (which AT&T owns) at an unfair advantage.
We believe, and our investigation has found, the merger would harm competition, resulting in higher bills and less innovation for millions of American consumers, – Official
AT&T has already criticized the lawsuit. The companys general counsel David McAtee said the lawsuit is a radical and inexplicable departure from decades of antitrust precedent.
He goes on say that vertical mergers (mergers where companies keep all respective brands i.e. T-Mobile and Metro PCS) such as the AT&T-Time Warner one are usually approved because they benefit consumers without removing any competitor from the market. We see no legitimate reason for our merger to be treated differently, said McAtee.
McAtee says the company is confident that the Court will reject the Governments claims and permit this merger under longstanding legal precedent.
Trump made a lot of blatantly empty promises during his presidential campaign. One of them was actually to stop the supposed merger of AT&T and Timer Warner around the time when it was first announced in late-2016:
AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration, because its too much concentration of power in the hands of too few.
– Donald J Trump