The decision of Trump’s Department of Justice (DoJ) to block the AT&T-Time Warner merger worth $85 billion might fail because of political domination suspicions. But, acknowledging its benefits, it might mark a fundamental diversion in antitrust policy which will help in the modification or completely blocking the industrial mergers that are potentially harmful for the consumers.
The move confused both the telecom & media industries and the Wall Street beyond their imagination. Consumer groups cheered for the decision of Department of Justice and remarked it as a decision that can protect people from expensive cable bills and make sure that web-based substitutes to TV won’t die.
However the matter is complicated as President Donald Trump has a long-term dispute with CNN, which is a Time-Warner company, often defamed by Trump’s remarks such as “failing” and “fake news”. Moreover, Trump remarked the deal between AT&T and Time-Warner as “Not good for the country.”
The DoJ suggested that the case can be resolved if AT&T sale off DirecTV or the sale of CNN by Time Warner. However, AT&T has rejected the offer as they don’t want to lose the control of CNN.
As claimed by AT&T, the merger won’t give rise to expensive TV bills and will be beneficiary for the consumers with modernization in packaging video. However, AT&T’s statement is opposed by The Department of Justice and some other experts.
Moreover, the Government claims that AT&T might charge leading streaming services inordinately higher fees for the right of channels such as HBO, or even conceal them, increasing the market competition against AT&T’s services. But AT&T said that it aims to increase the Time Warner’s distribution and have no intentions to limit it.
The suit filed against AT&T might revolutionize a more aggressive approach of Department of Justice in antitrust.
As per Eleanor Fox, Professor of Law, New York University, “If it’s politically motivated because the president doesn’t like CNN, then it’s just a wild card.”
She added to her statement, “If this represents a change of heart, to be much more aggressive against mergers, it would be a game changer.”