US: DOJ claims AT&T-Time Warner merger is “frontal attack” on the law

Lawyers offered contrasting arguments in US federal court Thursday, March 22, as the trial kicked off over the government’s lawsuit seeking to block the US$85 billion merger of the largest US pay TV operator with one of the biggest media-entertainment firms.

Craig Conrath, the US Department of Justice (DOJ) attorney arguing for the government, said the tie-up would give AT&T an unfair edge against rival companies and lead to higher prices for the nation’s 90 million pay TV subscribers.

“Vertical integration in this industry can indeed be a weapon to hinder competition” the DOJ lawyer said. Conrath claimed that AT&T’s merger is a “frontal attack” on the law because it threatens competition in the TV industry.

But Daniel Petrocelli, the lawyer for AT&T and Time Warner, said in his opening argument that consumers would benefit from a combined firm that competes against tech giants which are dominating advertising and moving increasingly into television.

Disputing the government’s claim that prices would rise for consumers, Petrocelli said the combined firm would be able to perform better in advertising by using data on consumers that AT&T has but Time Warner lacks.

The deal announced in late 2016 would give AT&T—a leading wireless telecom group with some 23 million pay TV customers via cable and its DirecTV unit—the assets of Time Warner, including the Warner Bros studios, HBO, Turner Broadcasting and CNN.

Full Content: The Washington Post

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