The following article by Harper Neidig was posted on the Hill website November 22, 2017:
President Trump’s feud with CNN is casting a shadow over the Justice Department’s lawsuit to block AT&T from merging with Time Warner, the news outlet’s parent company.
The Justice Department’s decision to bring a lawsuit against a vertical merger — a deal involving two companies that aren’t direct competitors — is a major shift in antitrust policy from previous administrations.
To those who have been raising the alarm about corporate consolidation, the move is long overdue, and a sign that regulators in the Trump administration won’t be a rubber stamp for such major deals.
But AT&T and its supporters are suggesting the policy shift is being driven by something other than antitrust law — namely, Trump’s long-running feud with CNN, a network owned by Time Warner.
“Frankly, I don’t know” if the White House interfered in the merger review, AT&T CEO Randall Stephenson said in a press conference on Monday. “But nobody should be surprised that the question keeps coming up.”
Legal experts have suggested AT&T could use the discovery process in the antitrust lawsuit to seek evidence of political motivations in the merger decision. But others are skeptical that tactic would work.
Jonathan Rubin, an antitrust attorney and partner at the law firm MoginRubin, said AT&T would have to answer regulators’ claims that the merger will hurt competitors and consumers. Making the case that Trump interfered in the decision may not sway a judge, he said.
“As a matter of public relations, as a nonlegal matter, that sort of thing might have some usefulness for AT&T,” Rubin said. “As a strategy, as a specific defense in the courtroom, I think it would be futile.”
For its part, AT&T has said that any evidence of improper conduct by the administration won’t bode well for the government if it emerges during trial. But the company has emphasized that it believes it has a strong case in favor of the merger, arguing that there is no recent precedent for a vertical deal being blocked in court.
Trump vowed to block the deal in an October 2016 campaign speech, saying such mergers “destroy democracy.”
“As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” Trump said in the Gettysburg, Pa., speech.
Trump reiterated his opposition to the merger Wednesday before leaving Washington to spend Thanksgiving at his Mar-a-Lago club.
“Personally, I’ve always felt that that was a deal that’s not good for the country,” he said.
Since coming into office, Trump has repeatedly attacked CNN over its coverage of him.
In July, The New York Times reported that the White House was discussing how to use the AT&T merger as leverage over the news outlet. And earlier this month, it was reported that the Justice Department had demanded that AT&T sell Turner Broadcasting — CNN’s parent company — from Time Warner in order to get the merger approved, though Stephenson denied those reports.
The Justice Department and the White House have both denied any improper interference in the merger review process.
But some opponents of the merger see the political interference narrative as a distraction from what they see as a legitimate case against the $85 billion tie-up.
Democratic lawmakers and consumer groups have argued that together AT&T and Time Warner would be able to jack up prices for networks like HBO, TNT and TBS — all Time Warner subsidiaries. Critics also contend that AT&T’s control of Time Warner’s programming would have anticompetitive effects on rival content distributors and creators.
“Where I am concerned is that AT&T is obviously trying to make this about the politics rather than about the law,” said Harold Feld, senior vice president at Public Knowledge. “The fact is, there were a lot of people who objected to this merger when it came out, before Trump started tweeting about CNN.”
AT&T argues that it has no incentive to withhold programming from rivals, saying it would benefit more from ensuring that its content would be as widely available as possible.
In a speech to the American Bar Association last week, Makan Delrahim, the top antitrust official in the Justice Department, criticized the previous administration’s decision to approve a similar merger in Comcast’s acquisition of NBC Universal under certain “behavioral” conditions. He said that regulators shouldn’t approve such mergers unless companies agree to sell off certain assets that could pose harm to competition.
Sen. Orrin Hatch (R-Utah), while not taking a position on the merger, said he was proud of Delrahim for pursuing the lawsuit against the AT&T-Time Warner deal.
“Throughout an unnecessarily protracted confirmation debate, there were voices suggesting he wasn’t disinterested enough, independent enough, or open-minded enough, to make the tough calls that the Antitrust Division requires. Today, those in doubt learned otherwise,” Hatch said in a statement.
AT&T could try in the legal proceedings to force the Justice Department and the White House to divulge communications about the merger in the hopes that it will find a clear sign of political interference. The company could even try to depose Trump.
But the administration could claim that any such communications are irrelevant or privileged, ultimately leaving it up to the judge to decide what is permissible.
Opponents of the deal argue that the court case will be decided on whether the Justice Department can prove its case on the merits.
Andrew Jay Schwartzman, a telecom lawyer with the Georgetown University Law Center, said Trump’s feelings about the deal should have little effect on the outcome of the case.
“The critical issue here is whether this combination causes economic harm,” he said. “Even if it turns out the Trump administration wanted to bring the case, that should not in my mind preclude the requisite finding that this violates antitrust law.”
View the post here.