When President-elect Donald Trump takes office next month, one of the biggest items awaiting his Justice Department will be the antitrust review of the proposed $85 billion merger of AT&T and Time Warner, a deal that could have major ramifications for online video and TV distribution arrangements.
Trump addressed the proposed acquisition when it was announced in October while on the campaign trail, saying in no uncertain terms that he opposed the deal on the grounds that the combined entity would hold too much market power. Many consumer advocates feel the same way.
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But stewards of the deal are undeterred, and the coming antitrust review will not be Trump’s alone to complete, but rather will fall to his Justice Department, set to be led by Alabama Sen. Jeff Sessions, provided he wins Senate confirmation to the position of attorney general.
A spokesman for Sessions did not immediately respond to a request for comment on the AT&T/Time Warner merger or the senator’s views on antitrust enforcement generally.
AT&T and Time Warner execs defend the merger
At a recent hearing of the Senate Judiciary Committee’s subcommittee on antitrust, AT&T CEO Randall Stephenson touted the benefits of the merger, brushing aside criticism with assurances that the combined entity will bring a needed measure of competition to the cable sector and continue to produce novel distribution packages such as the DirectTV Now streaming service.
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“My expectation was when we announced this deal, and is today, that the Department of Justice will be the one reviewing this transaction and making the determination whether it’s competitive or not, and is it competitive under the law,” Stephenson said. “And so our expectation is to present our facts. We actually believe the facts are going to be very compelling and very good that this is pro-competitive and pro-consumer.”
Time Warner CEO Jeffrey Bewkes also noted that Trump was not alone in his criticism of the merger, but argued that that kneejerk opposition was misplaced and premature.
“There were comments made by candidates on all sides, including Mr. [Bernie] Sanders, Mr. [Tim] Kaine, saying that they were against the merger, again, before any of them had the information,” Bewkes said. “We’re confident that once everyone … hears the facts and has the appropriate competitive analysis on this that it will be seen and concluded by everyone — even with the concerns you’ve stated — that this will have pro-competitive effects that will benefit both competitive structures, diversity of voices and consumer price alternatives. We believe it and we think we can prove it.”
Many members of the antitrust subcommittee — on both sides of the aisle — expressed skepticism about the merits of the merger, however, including Connecticut Democrat Richard Blumenthal, who recalled Trump’s own criticism of the deal on the campaign trail.
Trump is very vocal in his opposition of the merger
“Speaking very bluntly, what I think, what any of my colleagues think, may make no difference whatsoever, because Donald Trump has said he’s going to block this merger, and I take him at his word.” Laughter could be heard from some of the members and staffers. “Why?” Blumenthal deadpanned.
In October, after the deal was announced, Trump said in a speech:
“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.”
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Trump went on in that speech to criticize what he called Amazon’s failure to pay “massive taxes” and cited the retailer’s ownership’s association with The Washington Post (Amazon founder and CEO Jeff Bezos bought the Post through his private investment company), as well as Comcast’s purchase of NBC, which among recent mergers perhaps most closely resembles the AT&T/Time Warner deal.
“Comcast’s purchase of NBC concentrates far too much power in one massive entity that is trying to tell the voters what to think and what to do,” Trump said in October. “Deals like this destroy democracy, and we’ll look at breaking that deal up and other deals like that. This should never ever haven been approved in the first place.”
Blumenthal, who identified himself “a strong supporter of antitrust enforcement,” called Trump’s comments on the concentration of power within a combined AT&T/Time Warner “a classic antitrust analysis” and an area where he and the president-elect might find common ground.
But he also said that he is alarmed by Trump’s tendency to interject his dismay over what he perceives as hostile media coverage into discussions of corporate transactions involving outlets like NBC, the Post or Time Warner’s CNN.