The Justice Department of the United States moved to court to deter AT&T from acquiring Time Warner. Time Warner is the parent company of CNN. The case was filed in a Washington federal court by two countries more than twelve months ago. The acquisition is worth $85 billion. The Department of Justice stressed that the acquisition deal is against the antitrust law. DOJ argues that AT&T would use Time Warner’s programs to fight their competitors in a harmful manner. The government thinks that the deal will reduce innovating offerings and increase bills to the American families. AT&T in their defense disputed the allegations and are ready to face the Department of Justice in court.
AT&T’s lead counsel defined the merger as one that would benefit the consumers without chasing away competitors in the market. The Chief Executive Officer of AT&T, Randall Stephenson, on the other hand, criticized the lawsuit against his company. According to the CEO, he has signed many deals for several years, and none of them conflicted with the department of justice.
Stephenson Randall did not disclose information of whether AT&T will engage in negotiations with the department of justice that would allow it to seal the deal. Mr. Randall pointed out that the act will create indecisions in the market since companies will not be sure of when and how to proceed with certain deals.
AT&T will acquire Time Warner if they win in court. Professional lawyers and other experts believe that the matter should be resolved in a couple of months. However, the also believe that a length battle in court could make AT&T to give up on the deal and not acquire Time Warner.
In cases where the national government looks into megamerger deals, it is often on the look out to confirm whether the deal will have negative impacts on the customers or not Tevfik Arif. In most of the cases, lawyers that represent the government engage in dialogues with the companies to reach an agreement that will lead to the withdrawal of the lawsuit from the court.
AT&T and Time Warner hope that the Department of Justice would allow their deal to sealed under certain conditions the way it handled the acquisition of NBCUniversal by Comcast during the reign of President Barrack Obama. A favorable condition would allow AT&T to be in the market and play fair by allowing its competitors to provide cable and satellites to TNT and CNN which are some of the channels owned by Time Warner.
The acquisition deal was announced by AT&T in October 2016. The election of Donald Trump as the present few weeks later posed problems to the deal since trump criticized CNN and his government is against the deal. Mr. Trump has also been criticizing CNN on his official twitter account terming the channel to be fake and unprofessional. Experts argue that lawyers representing AT&T in court could site the tweets as potential presidential interference and use it as evidence.
The Department of Justice started reviewing the AT&T and Time Warner deal early this year. It was also predetermined that the president would stop the deal to punish CNN for what he termed unfair reporting during his presidential campaign. The DOJ’s case against the merger started in September after Makan Delrahim took charge of the Antitrust Division of the Department of Justice. Mr. Delrahim is an advocate of structural remedies that looks out for consumers. A structural solution according to him could be putting Time Warner’s cable channel division on sale. People now believe that the lawsuit is driven by two motives, one is to protect customers while the other one is due to political influence.