Trump administration to sue to block AT&T-Time Warner deal
The Justice Department plans to file a lawsuit Monday to block the AT&T-Time Warner merger, according to a source familiar with the matter.
The move comes amid a growing political storm over whether the Trump administration has tried to use its review of the merger to force the sale of CNN, a frequent target of the president’s media criticism.
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AT&T said it’s confident it will win a court fight, with general counsel David McAtee calling the DOJ lawsuit a “radical and inexplicable departure from decades of antitrust precedent.”
“Vertical mergers like this one are routinely approved because they benefit consumers without removing any competitor from the market. We see no legitimate reason for our merger to be treated differently,” McAtee said in a statement. “We are confident that the Court will reject the Government’s claims and permit this merger under longstanding legal precedent.”
Sources familiar with the $85 billion deal told POLITICO earlier this month that the DOJ gave the companies an ultimatum to either sell Time Warner’s Turner Broadcasting, which includes CNN as well as networks like TBS and TNT, or shed satellite television provider DirecTV. The sources said it’s clear the government’s main sticking point is CNN, which Trump often maligns as “fake news.”
Unnamed DOJ officials later offered reporters a much different account, saying the companies themselves offered to sell CNN in order to close the deal — an option the officials said they rejected. AT&T CEO Randall Stephenson has called that untrue, saying his company “never offered to sell CNN and have no intention of doing so.”
As the negotiations hit an impasse in recent weeks, the two sides gave signs of preparing for a court battle. Stephenson, speaking at a Nov. 9 conference, said AT&T is fully prepared to litigate if the Justice Department rejects the transaction and would ask for an expedited hearing. The company also hired attorney Daniel Petrocelli, who once represented Trump, in preparation for the legal fight.
AT&T spent most of this year confident the government would approve the mega-deal because it’s considered a “vertical” merger that doesn’t eliminate a competitor from the market. But the arrival of Makan Delrahim, Trump’s nominee for DOJ antitrust chief, in late September appears to have changed the equation, and the issue of divestitures took center stage.
Trump, who has repeatedly derided CNN’s coverage of his administration, has loomed over the deal since the companies announced it a little over a year ago. Shortly after the merger was announced in October 2016, then-candidate Trump said in a speech in Gettysburg, Pa., that his administration would block the deal on populist grounds — that it would place “too much concentration of power in the hands of too few.”
Since then, he has kept up his Twitter-fueled attacks on the news network, tweeting as recently as last week that he was “forced” to watch CNN while in the Philippines and “again realized how bad, and FAKE, it is. Loser!”
Trump’s history of statements about the merger and CNN — including tweeting an edited professional wrestling video that showed him striking a man whose head is replaced by a CNN logo — are expected to be fodder for AT&T’s arguments in the court case. Even Democratic lawmakers who oppose the deal on ideological grounds have expressed concern that politics has poisoned the merger’s review.