The United States Justice Department today filed a lawsuit to stop a planned merger between AT&T and Time Warner, reports Bloomberg. The DOJ believes such a merger would result in higher bills and fewer options for consumers.
"This merger would greatly harm American consumers. It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy," said Makan Delrahim, the head of the department's antitrust division.
According to Bloomberg, this is the first time in several decades that the DOJ has sued to block a vertical deal, aka a merger between two companies that do not directly compete with one another. The lawsuit comes following a request from antitrust head Delrahim that the two companies sell either the Turner broadcasting unit or DirecTV, which AT&T refused to do.
Given that the DOJ does not usually step in to block vertical deals, it is unclear how this legal battle will play out in court. Other similar deals, such as Comcast's purchase of NBC Universal, have gone through after certain conditions have been put in place.
AT&T and Time Warner have been in talks over a merger since late 2016, with AT&T planning to shell out $85.4 billion for Time Warner.
AT&T says the DOJ's lawsuit is a "radical and inexplicable departure from decades of antitrust precedent," and that it is confident the court will reject the claims and allow the merger to proceed.
Apple at one time was rumored to be interested in a Time Warner purchase and was said to have monitored the deal between AT&T/Time Warner closely, but Apple ultimately had no interest in Time Warner or outbidding AT&T.
Top Rated Comments
Sinclair Broadcasting Group will control the eyes of the vast majority of American viewers, and be pumping their brand of conspiracy theories and outright lies into them as much as they can.
People that think Fox News is hard right need to realize that Sinclair has frightened News Corp. They are growing afraid if being left for dead after Sinclair takes over.
John Oliver on Sinclair Broadcasting Group ('//www.youtube.com/watch?v=GvtNyOzGogc')
[doublepost=1511221118][/doublepost]You think that trump and his hand picked FCC head will allow a vote by the people on Net Neutrality? And you think will make a difference? Sinclair, Fox News, and all the usual outlets of outright lies will not allow the people to know how they are being sold down the river by that disaster. Nope...
People were more up in arms about the fake rumors that there would be an 'internet sales tax' than they will be about 'net neutrality'.
I explained it to a few people who had no clue, and they were furious, but otherwise had nothing good to say in the subject. The industry sees MONEY, they will HAVE their money, having to lie and obfuscate won't stop them
The DOJ wants AT&T to sell CNN. AT&T refuses so they did this.
https://www.google.com/amp/s/www.cnbc.com/amp/2017/11/08/doj-demands-cnn-or-directv-be-sold-as-condition-for-att-time-warner-deal-approval.html
Guess all that “fake news” is too much for this administration’s delicate feeling.
That said. This is a disturbing trend in media consolidation. Disney bought a bunch of media properties lately as well as ABC and ESPN along with their respective broadcasting networks. As TV networks don’t “own” their stations it was a huge end-run of some of the standing FCC rules.
Comcast bought NBC which again included a huge stable of networks and broadcast stations. Where Disney is a media company trying to lock down distributors, Comcast is a cable/ISP trying to get leverage with other media companies. But it sets an even more dangerous precedent with them owing mmedia creators AND the channel people connect to them.
AT&T is just crazy huge already. Again, they’re an Wireless company AND ISP trying to be a cable company AND media creator. They bent a lot of rules to get Dish Network then turned around and played “shell games” with the FCC buying and selling smaller companies just after the settlement that seemed to go against the spirit of the previous rulings.
I understand why they do it. Media is the biggest cost of running a cable company now. Big media consolidated to like five companies a decade ago.. they beat everyone in cable up on pricing... now cable companies each pay enough of their yearly budgets just to take the media companies over and have a down payment built in.
We have to push back at some point because vertical monopolies are worse than horizontal ones... and that might be the game. Imagine the power they have when each ISP/Media/Wireless/broadcast provider has a solid monopoly one 1/5 of the country. They’re already fighting net neutrality from both sides as “overburdened ISP/Wireless” and as “pirate stricken media” companies. It’s a scary move.