Mother Jones: The Government’s Failure to Block the AT&T-Time Warner Merger Could Lead to Even Bigger Monopolies
The Justice Department lost its appeal of the politically charged AT&T-Time Warner merger last week, potentially putting some brakes on a burgeoning anti-monopoly movement and putting pressure on Congress to act instead.
The case marked the first time in more than 40 years that the government filed a case challenging a “vertical merger,” which is when two companies that don’t directly compete head-to-head but are in related industries merge, like a telecommunications giant (AT&T) and a cable television company (Time Warner). While the merger was on hold pending the DOJ’s challenge, Time Warner had created and sold television content and AT&T had been one of the buyers of their content. Now the buyer (AT&T) and seller (Time Warner) will become one company.
There was significant political pressure from the White House to pursue litigation against the deal, with President Donald Trump vocally opposing the merger. Despite claiming he was “not going to get involved,” Trump allegedly ordered Gary Cohn, then the director of the National Economic Council, to pressure the DOJ to intervene in the merger, according to a report from The New Yorker this week. According to the story, Cohn did not act on Trump’s orders to influence the DOJ, but a former White House official told The New Yorker that Trump “wanted to bring down the hammer” on the merger. The DOJ denies any interference by the White House or Trump and claims the merger was blocked because it would be anticompetitive and harm consumers.
The DOJ losing its appeal against this merger could make it less likely to bring forth such ambitious antitrust lawsuits in the near future. Before this litigation, in the past decade the DOJ had built some momentum in regards to merger cases, winning a number back to back. This loss may break some of that momentum and perhaps continue the DOJ’s low antitrust enforcement rate under the Trump administration.