Update (4:20 pm ET): David R. McAtee II, Senior Executive Vice President and General Counsel at AT&T, has released a statement responding to reports DOJ plans to sue to block its purchase of Time Warner.
In the statement, McAtee says he's "confident" the courts will side with AT&T..
"Today's DOJ lawsuit is a radical and inexplicable departure from decades of antitrust precedent. Vertical mergers like this one are routinely approved because they benefit consumers without removing any competitor from the market. We see no legitimate reason for our merger to be treated differently.
"Our merger combines Time Warner's content and talent with AT&T's TV, wireless and broadband distribution platforms. The result will help make television more affordable, innovative, interactive and mobile. Fortunately, the Department of Justice doesn't have the final say in this matter. Rather, it bears the burden of proving to the U.S. District Court that the transaction violates the law. We are confident that the Court will reject the Government's claims and permit this merger under longstanding legal precedent."
The DOJ Is expected to make a "major statement" about an anti-trust action within the hour. It's been widely reported that the AT&T-Time Warner merger will be the subject of the statement.
AT&T CEO Randall Stephenson recently said he was never told that selling CNN would be a condition of getting the deal done. But he said that the company was prepared to fight in court to save the deal, if necessary, according to the Financial Times.
“Since the day we announced this we’ve been preparing to litigate this deal,” he said. “We are prepared to litigate now," Stephenson said.
* * *
Just minutes after the DOJ announced that it would be unveiling a major anti-trust action late Monday, Bloomberg reported that AT&T will be the target of said action (as Amazon sneaks by one more day). Late last year, AT&T announced that it had agreed to buy Time Warner in another controversial merger of content creators and distributors.
The news hammered shares of Time Warner, which dropped nearly 2% as investors realized that the White House is preparing to act on President Donald Trump’s campaign-season threat to block the $85.4 billion merger. Meanwhile, shares of AT&T climbed.
The reports are the culmination of more than a week of sparring over the deal and dealing a major blow to the carrier’s bid to create a media and telecommunications empire, Bloomberg reported. NBC also confirmed the news.
The challenge would derail a deal that had appeared to be sailing toward approval as recently as a month ago. That was before the new US antitrust chief Makan Delrahim took up his position and took over the investigation. During negotiations he pushed for the companies to sell the Turner broadcasting unit or DirecTV, a request that AT&T rejected. Last week, reports emerged that the DOJ had asked Time Warner to sell its Turner Broadcasting unit, which includes cable news network CNN. Later, the DOJ said AT&T and Time Warner had offered to sell CNN if that would cause DOJ to drop its opposition to the deal.
http://www.zerohedge.com/news/2017-11-20/time-warner-shares-drop-reports-doj-plans-block-att-deal....
This is an interesting case which could be worth watching.
AT&T is attempting to buy Time Warner which would further
centralize news media and internet providers under a single corporate entity. This could reduce industry wide competition which in turn produces stagnation, lack of innovation and progress. In theory, this may be correlated with lower quality products, higher cost and fees and introduction of predatory/exploitive business practices.
If the deal goes through and bad consequences arise as a result, we could have a real life example of how centralization & monopolies can be bad precedents. There isn't a lot of real world application to the centralization versus decentralization debate sometimes. Perhaps there can be some value in this.
