AT&T vowed to put up a fight after the US Department of Justice (DoJ) confirmed it will sue the operator in an attempt to block an $85 billion merger with content company Time Warner.
DoJ antitrust chief Makan Delrahim alleged the deal would “greatly harm American consumers” and result in “higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy.”
Specifically, the DoJ claimed in its legal complaint AT&T would have the “incentive and ability” to charge rivals “hundreds of millions of dollars more” for the right to distribute content from major Time Warner properties including HBO and CNN.
In a statement, AT&T general counsel David McAtee called the lawsuit a “radical and inexplicable departure from decades of antitrust precedent” and asserted there is no “legitimate reason” for the transaction to be treated differently than any other vertical merger.
However, McAtee indicated the operator remains confident it will be victorious in court: “Fortunately the Department of Justice doesn’t have the final say in this matter. Rather, it bears the burden of proving to the US 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.”
AT&T said it will ask the court to schedule a hearing on the DoJ’s claims as soon as possible, hopefully within 60 days.
In a press conference held Monday, AT&T CEO Randall Stephenson said he’s never done a deal in his career “where we’ve disagreed with the Department of Justice so much on even the most basic of facts”. Still, the operator offered “concrete and substantial” solutions to alleviate DoJ concerns. The first indication AT&T was at an impasse with the DoJ came when the latter filed its lawsuit on Monday (20 November), Stephenson said.
AT&T officials declined to comment on the kinds of concessions it offered, but Stephenson noted AT&T believes “any divestiture of AT&T assets or Time Warner assets is not required by the law.”
Stephenson also directly addressed rumours the DoJ’s decision was driven by President Donald Trump’s personal dislike of CNN, a Time Warner property. Stephenson said he did not know whether Trump’s opinion was a factor, but indicated any requirement for AT&T to forfeit CNN would be a “non-starter”.
“We cannot and we will not be party to any agreement that would even give the perception of compromising the First Amendment protections of the press,” he said.
History of approval
As noted by AT&T, the DoJ has a track record of approving vertical mergers. The DoJ failed to blocked a vertical merger in court in almost 50 years, and lost the last case it attempted to bar by going to trial.
The Time Warner deal already secured approval from 18 other jurisdictions, including regulators in Brazil, Chile, Mexico and the European Commission. A sign off from the DoJ is the only remaining obstacle to the deal’s completion. AT&T and Time Warner already agreed to extend their deal deadline to wait for DoJ approval.