Keep an eye on this AT&T merger issue. I think it’s going to blow up into a big thing.
We should have much more aggressive antitrust enforcement of all these mega-mergers and a more expansive theory of monopoly and antitrust to back it up. I’ve discussed my reasons before. But if you operate within the prevailing theories of antitrust, especially for a Republican administration, it’s hard to see why this merger would be prevented. Most legal experts see little basis in current law to block it.
AT&T and Time Warner have a profound interest in not politicizing this or sounding any alarms at all. It’s a business deal. If they get in Trump’s face it will never happen. But it is being followed closely at CNN. There’s growing suspicion on both sides of the transaction about what the Trump administration is up to. How this is unfolding doesn’t look at all like a normal administrative or review process works. It looks more like DOJ is trying to scuttle the deal or squeeze AT&T.
Earlier I noted FT’s report that the DOJ was making the sale of CNN a condition of the acquisition. But then unnamed Justice Department sources peddled a different story. They told The Hill and other publications that it was actually AT&T that proposed the sale of CNN to allow the deal to go forward. Those unnamed DOJ sources claimed DOJ refused AT&T’s proposal.
AT&T has now flatly denied such an offer was ever made. “Until now, we’ve never commented on our discussions with the DOJ. But given DOJ’s statement this afternoon, it’s important to set the record straight,” said AT&T CEO Randall Stephenson. So such an offer seems quite unlikely; getting access to CNN’s content was a key part of why AT&T wanted to purchase Time Warner in the first place. But the bigger deal is this: these leaks sound more like trash talk than how the DOJ normally runs any big antitrust review. It’s highly irregular. It’s like there’s another hand in the mix. Perhaps some very small hands.
There’s more. In 2016 Trump’s now head of the antitrust division, Makan Delrahim, said he didn’t see any major obstacles to the acquisition. Now the FT reports he’s changed his mind. Why would that happen? President Trump routinely flouts these boundaries: he fired James Comey, he demands the DOJ attack his enemies. The most logical explanation for all the weirdness is that the President is jamming the process. White House sources threatened to do as much earlier in the year.
Now that Stephenson has publicly denied DOJ’s claims I don’t think it will be possible to keep this as a business news story. People will begin asking if the President is corrupting the process. It may take a while because AT&T and Time Warner have every incentive not to make it a public controversy if they can help it. But it’s probably spilled out into the open now too much to prevent that.
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