Question of the Week -- Do You Agree With The Ruling That AT&T’s Takeover of Time Warner Can Proceed Without Limitations?
By the C|C Whistleblower Lawyer Team
The New York Times reported that AT&T took one step closer to becoming a telecom-media giant after Richard J. Leon, a United States District Court judge, ruled that its $85.4 billion takeover of Time Warner can proceed without limitations.
The takeover was announced in October 2016, and is the latest effort by a big telecom or cable company to acquire media assets. The cable company Comcast owns NBCUniversal, and Verizon owns websites including Yahoo and HuffPost.
Speaking at a campaign rally in 2016, Mr. Trump said “AT&T is buying Time Warner, and thus CNN…a deal we will not approve in my administration.” Indeed, President Trump’s Justice Department sued to block the deal, though it said that he did not communicate with antitrust officials on the deal and that their decision to oppose the merger had not been ordered by the White House. The Justice Department argued that it would limit competition and raise costs. The companies countered that the deal would allow Time Warner and AT&T to compete more effectively against Silicon Valley companies like Google and Netflix.
A key argument against the government’s case was that the deal is a so-called vertical merger, which means that the two companies do not produce competing products: One makes media content, and the other distributes it. Those deals typically make it past regulators. Regulators often focus on keeping one company, or a small group of companies, from owning too much of any one specific industry. It comes up when companies buy their competitors – what’s known as horizontal integration.
What makes the AT&T decision noteworthy is that the deal was challenged by the government even though it doesn’t share all the characteristics of horizontal integration.
So what do you think? Do you agree with the ruling that AT&T’s takeover of Time Warner can proceed without limitations?
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