AT&T’s merger with Time Warner hits major roadblock

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U.S. government says AT&T/Time Warner merger would hurt customers
Photo: Luismt94/Wikipedia CC

The U.S. Justice Department has filed an antitrust lawsuit to block a planned AT&T and Time Warner deal — marking the first time in several decades the government has tried to block a merger between two companies that don’t directly compete with each other.

The AT&T chief says the suit, “defies logic and is unprecedented,” but the Justice Department claims that AT&T’s $85.4 billion bid to buy Time Warner would mean higher fees and fewer choices for customers.

The legal challenge is the first major antitrust case brought by the Trump administration. “This merger would greatly harm American consumers,” said Makan Delrahim, the head of the department’s antitrust division. “It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy.”

Should this case progress to court, it’s not at all clear how it will play out because of its difference from usual antitrust cases involving direct competition between the companies involved with the deal.

According to the head of AT&T, “the best legal minds in the country agreed that this transaction would be approved.” He also suggested that the “elephant in the room” is that the lawsuit involves Trump’s much-disliked CNN station, which is owned by Time Warner.

The government is reportedly open to dropping the lawsuit if the companies offer a proposal to fix the competitive harm from the deal, an official from the Justice Department told Bloomberg.