Discussions Between AT&T And DoJ Over Merger In Progress

Reports indicate that antitrust officials of the United States have begun discussions with representatives from Time Warner and AT&T regarding the possible conditions that will need to be fulfilled in order for the $85.4 billion merger to be approved. The talks are a suggestion that the government officials have completed their scrutiny of how the merger between AT&T, the largest pay-television distributor, and Time Warner, which owns HBO and CNN, would reshape the landscape in the media. It also reveals that agreements have been reached on how the merger can be made to work without causing harm to competitors.

Vertical merger

Antitrust officials in the United States have in the past blocked many mergers among direct competitors though they have hardly blocked vertical mergers like is the case with AT&T and Time Warner. According to sources, competitors in the media and pay television scene are believed to have told antitrust lawyers that there is fear that the telecommunications giant and pay television distributor might favor content developed and produced by its acquisition target over that of competitors.

Legislators from the Democratic Party have also sent out a warning that the merger was likely to lead to fewer choices for consumers and higher prices. During the 2016 presidential election campaigns, President Donald Trump is on record as having said that the merger would result in an overconcentration of media power in one entity.

Antitrust chief nominee

According to sources the main issue that the antitrust lawyers have chosen to focus on is whether the telecommunications giant can demonstrate that it will not use its position to give preference to its own programming at the expense of other media companies. In 2016 following the announcement of the deal, Randall Stephenson, the chief executive officer of AT&T, disclosed that the telecom giant was ready to commit to conditions if that is what would be required to assuage concerns.

One challenge that the lawyers from the U.S. Department of Justice are currently grappling with is that the position of antitrust chief is yet to be filled as the nominee, Makan Delrahim, is yet to be confirmed by the U.S. Senate. Public statements by Delrahim seem to indicate that he is not opposed to the merger though. Earlier in the year he told senators that vertical mergers don’t usually raise competition concerns. Last year he also said that there weren’t any big antitrust hurdles standing in the way of the deal because it was a merger of a content provider and a distributor.

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