The planned AT&T Time Warner acquisition is to be blocked by the US Department of Justice. That is if the lawsuit filed by the DOJ is upheld. The reason for the lawsuit is that the Justice Department believes that the merger will reduce competition and is likely to lead to consumer price increases. This assertion is disputed.
Donald Trump’s Criticism of CNN
Unsurprisingly, AT&T is not happy regarding potential political interference in the acquisition process. President Donald Trump is a well known critic of CNN, which is a Time Warner company. He has frequently voiced criticism of the news network and has publicly stated his objections to the AT&T Time Warner acquisition. Randall Stephenson, president of AT&T, has voiced his suspicion that the lawsuit may be more about CNN than AT&T and Time Warner.
Could the AT&T Time Acquisition Result in Price Increases?
The Department of Justice has maintained that the $85+ billion deal would lead to increased TV bills for consumers. It would also result in less innovation that had been occurring in the recent past. It was also claimed that AT&T could force rival firms to pay much more for TV content from Time Warner, a claim which was denied by AT&T. Political interference in the acquisition process was denied by the Department of Justice.
Prior to the presidential election, Donald Trump had stated that the acquisition would not be approved in his administration. This was because it would mean “too much concentration of power in the hands of too few.”
Turner Broadcasting and CNN
US media has reported in the past that the Justice Department had tried to push AT&T to sell off some of its assets, including Turner Broadcasting. This company owns CNN, but Randall Stephenson, chief executive of AT&T, has stated that he is not willing to lose CNN. While it is beginning to look like this is at least partially a political situation, it may not all be.
Whether or not the A&T Time Warner acquisition will go ahead is still undecided. The situation is still to be resolved with a settlement acceptable to both parties. However, if it does not, then many will believe this may be due to political interference in a civil matter. This is denied.