The US Department of Justice (DoJ) has filed a civil antitrust lawsuit to block AT&T Inc’s proposed acquisition of media giant Time Warner, arguing that the deal would substantially lessen competition, resulting in higher prices and less innovation for millions of Americans. According to the complaint, which was filed in the United States District Court for the District of Columbia, ‘the combined company would use its control over Time Warner’s valuable and highly popular networks to hinder its rivals by forcing them to pay hundreds of millions of dollars more per year for the right to distribute those networks. The combined company would also use its increased power to slow the industry’s transition to new and exciting video distribution models that provide greater choice for consumers, resulting in fewer innovative offerings and higher bills for American families’.
Responding to the development, David R. McAtee II, Senior Executive Vice President and General Counsel for AT&T Inc, commented: ‘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 … We are confident that the Court will reject the government’s claims and permit this merger under longstanding legal precedent.’
Industry observers have noted that President Trump is a vocal critic of CNN, which is owned by Time Warner, and it has been suggested that his prolific Tweets on the subject could yet complicate his administration’s agenda, and lead to legal arguments further down the line.