AT&T resists divestitures in Time Warner merger - Mobile World Live

AT&T resists divestitures in Time Warner merger

04 MAY 2018

AT&T pushed back against a suggestion from the US Department of Justice (DoJ) that it be required to divest some of its assets in exchange for approval of its merger with Time Warner.

The DoJ put the idea of a “partial divestiture” before trial Judge Richard Leon in filings as part of its court battle to block the AT&T deal.

The government based its case on the idea that AT&T’s tie up with Time Warner would reduce competition and raise prices for consumers. Unlike a behavioural remedy, which prohibits specific anticompetitive practices, DoJ lawyers argued a divestiture would entail the sale of assets causing competitive concern, thereby eliminating incentives for the company to engage in anticompetitive behaviour.

But AT&T fought back in its closing brief, noting the DoJ presented “no basis to impose any remedies at all, much less divestitures that would destroy the value of the transaction”.

If it were forced to give up DirecTV, AT&T said it would not be able to offer a planned price decrease for millions of consumers. Divesting Time Warner’s Turner property, which is home to a number of entertainment, sports and news brands, would “eliminate the content innovations and the advertising benefits that put downward pressure on Turner prices,” it continued.

The operator asserted the government “did not even begin to make a credible case that the merger would likely harm competition,” and urged the court to rule in its favour approving the transaction.

Leon said he expects to issue a decision in the case by 12 June. AT&T and Time Warner’s deadline to close the deal is 21 June.

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Diana Goovaerts

Diana joins Mobile World Live as its new US Editor, reporting on infrastructure and spectrum rollouts, regulatory issues, and other carrier news from the US market. Diana comes to GSMA from her former role as Editor of Wireless Week and...

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