A Bloomberg report has indicated that AT&T will face an antitrust lawsuit from the U.S Department of Justice over its plan to merge with Time Warner. What’s happening exactly? AT&T is trying to buy Time Warner (for $85.4 billion), and now AT&T is being sued by the DOJ. Randall Stephenson, AT&T’s CEO said that the lawsuit “stretches the very idea of antitrust law beyond the breaking point”. The real issue? They aren’t willing to sell off CNN in order to appease “Washington”. I put that in quotes as I think we know that it’s maybe just one person. AT&T’s attorney has even said that they’re prepared (and willing) to go to trial in as few as 60 days. Which would put this in the hands of a judge.
April 22 is the date when both companies can back out of the deal without a penalty. It’s likely that AT&T’s attorneys are going to want a decision before then. But it also sounds like they’re willing to go to battle on this one. And you can’t really blame them, can you? But this legal action being brought forward by the Trump Administration is a major blow to those negotiations.
The new head of the DOJ’s antitrust division – Makan Delrahim notes, “this merger would greatly harm American consumers. It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy”. Will it though? Stephenson was extremely surprised by these turn of events. He indicates, “when we announced this deal, the best legal minds in the country agreed that this transaction would be approved since our companies don’t even compete with each other”. Which is why it seems like this is coming straight from Trump himself.
You may recall, Trump has been gunning for CNN for a while now. He also has this weird idea about fake news. When it helps him, it’s ok, but when the media reports things that make him look bad, they’re suddenly fake news? Don’t get me wrong, I think someone should investigate fake news and come up with a way to manage it – and that seems to be happening right now. But the problem isn’t with news outlets, like CNN. The problem, as we know, is how misinformation is spread. In this case, it happens to be through social media platforms like Facebook and Twitter.
Further, Stephenson suggests that there is an elephant in the room. Meaning – is this about Trump? Stephenson states, “frankly, I don’t know. But nobody should be surprised that the question keeps coming up because we’ve witnessed such an abrupt change in the application of antitrust law here”. And he’s right. We don’t know that it’s about Trump, but it does keep coming up again and again, so there is a good chance that there’s something there. In the event of a trial, AT&T intends to seek court permission to access communications between the White House and the Justice Department about this matter. The outcome of that will certainly be interesting for all of us, I expect.