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Justice Department files lawsuit against AT&T to block Time Warner merger
The Justice Department Monday filed a civil antitrust lawsuit in an attempt to thwart AT&T Inc.’s acquisition of Time Warner Inc.
The merger would be the largest media and telecommunications deal of its kind, set to cost AT&T $84.5 billion. In a press release, Justice said such an acquisition would “substantially lessen competition, resulting in higher prices and less innovation for millions of Americans.”
The lawsuit, which was filed in the U.S. District Court for the District of Columbia, said once the merger was complete, an AT&T with control of Time Warner’s various networks would begin charging its rivals more money, and at the same time use its power to slow down the progress of smaller innovative video distribution models.
AT&T Chief Executive Randall Stephenson (pictured) fired back during a press conference in New York, stating that the lawsuit “stretches the very reach of antitrust law beyond the breaking point.” He added that the company is open to negotiations that may result in the merger going through. He also said the lawsuit “defies logic and is unprecedented.”
Media lawyer Daniel Petrocelli, who has been hired to defend the merger, said the DoJ will struggle to prove that the merger will harm consumers.
“Under basic principles of law and economics, combining these two noncompeting companies should pose no problem,” he said. “The TV bill will not go up, and the combined company will not keep CNN, TNT, HBO or any other network to itself. Simply put, the theories in the DOJ’s complaint filed about an hour ago simply have no proof and make no sense in the real business world.”
The lawsuit has become even more controversial given that President Donald Trump has been candid in his disapproval towards CNN, which is owned by Time Warner. Trump recently said he watched CNN for the first time in a while and “realized how bad, and FAKE, it is. Loser!”
While in the Philippines I was forced to watch @CNN, which I have not done in months, and again realized how bad, and FAKE, it is. Loser!
— Donald J. Trump (@realDonaldTrump) November 15, 2017
Trump’s antipathy towards CNN has been called an “elephant in the room,” although the department has denied that blocking the merger is in any way political and said Trump was not attempting to punish the companies because of his distaste of CNN.
Image: utabusiness via Flickr
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