US: DoJ sues to block AT&T purchase of Time Warner

On Monday the Justice Department, sued AT&T to block its $85 billion merger with Time Warner, court filings show.  DOJ Complaint (PDF)

In a lawsuit filed in US District Court in Washington, federal prosecutors argued that the merger would hurt competitors and consumers.

“AT&T/DirecTV would hinder its rivals by forcing them to pay hundreds of millions of dollars more per year for Time Warner’s networks, and it would use its increased power to slow the industry’s transition to new and exciting video distribution models that provide greater choice for consumers,” the filing reads.

David McAtee, AT&T’s general counsel, said in a statement that the company is prepared to fight the regulators.

“Today’s DOJ lawsuit is a radical and inexplicable departure from decades of antitrust precedent,” McAtee said. “Vertical mergers like this one are routinely approved because they benefit consumers without removing any competitor from the market. We see no legitimate reason for our merger to be treated differently.”

Earlier this month it was reported that Justice Department officials had demanded that AT&T sell off CNN’s parent company from Time Warner as a condition for regulatory approval, raising questions about whether President Trump was intervening in the deal to retaliate against CNN for its critical coverage of him.

The Justice Department and the White House have both denied that there’s been any political interference in the merger review.

Makan Delrahim, the top antitrust regulator at the Justice Department, said in a speech last week that he plans to crack down on vertical mergers, such as the AT&T deal, that involve companies that don’t directly compete with each other. Delrahim criticized the Obama administration’s approval of similar mergers, such as Comcast’s purchase of NBC Universal in 2011.

Full Content: Full content: DOJ Complaint (PDF) & DOJ press release

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