Justice Department sues to block AT&T takeover of Time Warner, report says

Posted:
in General Discussion edited November 2017
AT&T's $85.4 billion bid to acquisition Time Warner is in jeopardy as reports on Monday claim the U.S. Department of Justice is set to file a lawsuit aimed at blocking the high-profile merger.




Earlier today, the Justice Department said it will make an announcement regarding a "major antitrust matter," news that several media outlets linked to AT&T's merger with Time Warner. Bloomberg, citing unnamed sources, was first to report on the coming coming lawsuit, followed by Politico and Reuters.

AT&T later confirmed the suit to CNBC, but failed to detail the Justice Department's legal action.

Announced over a year ago, AT&T's takeover of Time Warner has come under fire for what some view as a contentious consolidation of power. AT&T, a "big four" American telecommunications powerhouse, operates a wide array of phone, internet and TV businesses, while Time Warner owns big cable brands including HBO, CNN, TBS and the Cartoon Network.

Time Warner's proprietorship of CNN is at the heart of at least one theory regarding the Justice Department's unconventional move. In its report on the matter, CNN notes President Trump vowed to block the deal during his campaign, and has consistently taken to Twitter to criticize the news network for disseminating "fake news." Those tweets continue, the latest coming last week, in what CNN says could constitute evidence of presidential interference.

For its part, AT&T has been preparing for a legal scrum with the DOJ, the sole entity capable of blocking the takeover after FCC chairman Ajit Pai said his commission would not review the merger earlier this year. Last week, AT&T CEO Randall Stephenson said his company would seek an expedited hearing if met with a DOJ challenge.

Prior to the merger announcement last year, Apple was rumored to have held preliminary talks with Time Warner over a potential tie-up, but those discussions failed to bear fruit. Still, with fingers in content streaming, Apple reportedly closely monitored AT&T's moves in the lead-up to its $85.4 billion agreement with Time Warner.
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Comments

  • Reply 1 of 27
    rob53rob53 Posts: 2,028member
    I'd like to see them do the same thing to Comcast, who owns way too many businesses.
    macseekerClarityToSeeben20tallest skil
  • Reply 2 of 27
    rob53 said:
    I'd like to see them do the same thing to Comcast, who owns way too many businesses.

    I agree, but Comcast got in first so they got away with it, everyone else is paying the price they government is putting the breaks on things so no other can now come together.
  • Reply 3 of 27
    cpsrocpsro Posts: 2,460member
    Somehow I just don't sense complete independence of the Judiciary Branch from the Executive Branch.
    JFC_PAbshankjony0
  • Reply 4 of 27

    "Recent leaked reports suggest trouble for the proposed merger of AT&T and Time Warner, an $85 billion deal first announced over a year ago. Last Wednesday, government sources claimed the Department of Justice’s antitrust division was demanding that AT&T sell Turner Broadcasting channels, including CNN, as a condition for approving the deal — and that AT&T had refused, setting up a possible court challenge.

    Later stories reported it was AT&T that had offered to sell CNN. But CEO Randall Stephenson immediately denied both versions, and reiterated that the company will not let go of either CNN or the deal itself, pledging to fight the government if necessary"

    For vertical mergers, the government hasn’t won a single court case. Not one.

    edited November 2017 JFC_PAbshank
  • Reply 5 of 27
    This is just stupid. A vertical merger, with very few antitrust issues, in an industry (entertainment content) that is now hyper-comeptitive (i.e., if ATT tries and screw customers on price, they'll go elsewhere).

    If it was Time Warner Cable, I could understand, but this is just, plain stupid.

    I wouldn't be surprised if we discover that there were a couple of well-placed phone calls involved...
    SpamSandwichben20bshankMacPro
  • Reply 6 of 27
    rob53rob53 Posts: 2,028member
    This is just stupid. A vertical merger, with very few antitrust issues, in an industry (entertainment content) that is now hyper-comeptitive (i.e., if ATT tries and screw customers on price, they'll go elsewhere).

    If it was Time Warner Cable, I could understand, but this is just, plain stupid.

    I wouldn't be surprised if we discover that there were a couple of well-placed phone calls involved...
    How do you see this as being competitive? AT&T and Times Warner both offer internet but neither offers it where I live. I only have Comcast and Frontier (they bought out Verizon telephone service in WA in 2010). Frontier is a joke leaving me only with Comcast. Wave is trying to support some businesses where I live but not residential. The internet and entertainment businesses are not competitive, just ask Apple, who gave up trying to deal with them on a skinny bundle. 

    If you're only talking about cellular, then it might work but not the rest of the businesses AT&T and Times Warner are involved in. 
  • Reply 7 of 27
    wood1208wood1208 Posts: 1,957member
    We all know it's job security and keep agency going(funded) by suing, lengthy trial and settle out of court. Defender pays settlement money. Life goes on..
  • Reply 8 of 27
    rob53 said:
    This is just stupid. A vertical merger, with very few antitrust issues, in an industry (entertainment content) that is now hyper-comeptitive (i.e., if ATT tries and screw customers on price, they'll go elsewhere).

    If it was Time Warner Cable, I could understand, but this is just, plain stupid.

    I wouldn't be surprised if we discover that there were a couple of well-placed phone calls involved...
    How do you see this as being competitive? AT&T and Times Warner both offer internet but neither offers it where I live. 
    Both offer it where I live. So, now our anecdotal evidence is equal. What was your point? TWC was a direct competitor with speeds of 100-300Mbps, while att offering 50 for the same price. Surely, they are not competitors...Sigh.
    edited November 2017
  • Reply 9 of 27
    This is just stupid. A vertical merger, with very few antitrust issues, in an industry (entertainment content) that is now hyper-comeptitive (i.e., if ATT tries and screw customers on price, they'll go elsewhere).

    If it was Time Warner Cable, I could understand, but this is just, plain stupid.

    I wouldn't be surprised if we discover that there were a couple of well-placed phone calls involved...
    I agree. There's no monopoly here. Let these mergers go forward, but at the same time, ensure that the competitive marketplace remains competitive and free of protectionism (protectionism which usually originates in Washington, not due to the playing field itself).
  • Reply 10 of 27
    sdw2001sdw2001 Posts: 17,035member
    cpsro said:
    Somehow I just don't sense complete independence of the Judiciary Branch from the Executive Branch.
    Right, like that's ever been the case.  
    tallest skil
  • Reply 11 of 27
    sdw2001sdw2001 Posts: 17,035member

    This is just stupid. A vertical merger, with very few antitrust issues, in an industry (entertainment content) that is now hyper-comeptitive (i.e., if ATT tries and screw customers on price, they'll go elsewhere).

    If it was Time Warner Cable, I could understand, but this is just, plain stupid.

    I wouldn't be surprised if we discover that there were a couple of well-placed phone calls involved...

    That's interesting.  I actually wasn't aware of that.  In fact, I found Time Warner cable doesn't exist as a brand anymore.  I'm still not sure I like the idea of the merger.  There is far too much consolidation of power in media as it is.  You basically have Disney, Comcast/NBC Universal, Time Warner and 21st Century Fox (who may sell to Disney).  
  • Reply 12 of 27
    This is just stupid. A vertical merger, with very few antitrust issues, in an industry (entertainment content) that is now hyper-comeptitive (i.e., if ATT tries and screw customers on price, they'll go elsewhere).

    If it was Time Warner Cable, I could understand, but this is just, plain stupid.

    I wouldn't be surprised if we discover that there were a couple of well-placed phone calls involved...

    You do not understand this market. there are many place in US where people do not have choice. I am lucky, I have Comcast for all 3 services, I have Verizon, I have DirecTV and Dish, I can play them against each other for Video, but internet I have Comcast and VZ. Phone I have Comcast and VZ plus all the other third parties out there. Most places people only have one service along with Satellite if you have clear line of sight to the southwest. The issue is unless you get all three from VX or Comcast they really do not cut you a deal.

    Content cost drive the cost of your triple play services, the cost are being driven by content owners, and when the cable operators own the content they get to set the price to you and to their competitors. You can bet that Comcast does not charge as much to themselves for their content as they charge Directv.

    So many customer do not go elsewhere, you can cut of video content from Comcast, but they just up your internet costs to make up for the lost as you got to online services, but after to piece it all together, you bill is not much better than if you stayed where you were.

  • Reply 13 of 27
    ben20ben20 Posts: 120member
    This is just stupid. A vertical merger, with very few antitrust issues, in an industry (entertainment content) that is now hyper-comeptitive (i.e., if ATT tries and screw customers on price, they'll go elsewhere).

    If it was Time Warner Cable, I could understand, but this is just, plain stupid.

    I wouldn't be surprised if we discover that there were a couple of well-placed phone calls involved...
    You are looking at it from the totally wrong perspective. Justice department and AT&T have a long history of breakups.
  • Reply 14 of 27
    mac_128mac_128 Posts: 3,427member
    rob53 said:
    I'd like to see them do the same thing to Comcast, who owns way too many businesses.
    As long as they aren't stifling completion, who cares? The problem is on the one hand the Government is filing an unprecedented lawsuit to "protect the consumer", while on the other, it has rolled back regulations on Net neutrality which squarely hurts the consumer, and promotes big business. Meanwhile Sinclair and Tribune are moving ever closer to a merger which is clearly going to impact competition in the local markets. Washington is an even bigger swamp now than it was a year ago.
    gilly33hmurchison
  • Reply 15 of 27
    rob53 said:

    How do you see this as being competitive? AT&T and Times Warner both offer internet but neither offers it where I live. I only have Comcast and Frontier (they bought out Verizon telephone service in WA in 2010). Frontier is a joke leaving me only with Comcast. Wave is trying to support some businesses where I live but not residential. The internet and entertainment businesses are not competitive, just ask Apple, who gave up trying to deal with them on a skinny bundle.If you're only talking about cellular, then it might work but not the rest of the businesses AT&T and Times Warner are involved in. 
    You're confusing Time Warner, Inc. with Time Warner Cable (which was bought by Charter Communications last year). Time Warner, Inc. is not an internet provider. They are a media company which owns HBO, Turner Broadcasting System, The CW, Warner Bros., CNN, DC Comics, and 10% of Hulu.
    anantksundaram1STnTENDERBITS
  • Reply 16 of 27
    rob53 said:
    This is just stupid. A vertical merger, with very few antitrust issues, in an industry (entertainment content) that is now hyper-comeptitive (i.e., if ATT tries and screw customers on price, they'll go elsewhere).

    If it was Time Warner Cable, I could understand, but this is just, plain stupid.

    I wouldn't be surprised if we discover that there were a couple of well-placed phone calls involved...
    How do you see this as being competitive? 
    You're missing the point. The issue is not whether it is competitive. The only relevant legal issue is whether it's anti-competitive or not. The USDoJ will lose this one, I predict. (Of course, that prediction is worth the paper it's written on...)

    And, as @Fahlman points out, as a separate issue, your post conflates Time Warner Cable (which has already been sold) with Time Warner. 
    edited November 2017
  • Reply 17 of 27
    cpsro said:
    Somehow I just don't sense complete independence of the Judiciary Branch from the Executive Branch.
    The Justice Department is part of the executive branch of government. So naturally it is not independent from that branch.
    tallest skil
  • Reply 18 of 27
    maestro64 said:
    This is just stupid. A vertical merger, with very few antitrust issues, in an industry (entertainment content) that is now hyper-comeptitive (i.e., if ATT tries and screw customers on price, they'll go elsewhere).

    If it was Time Warner Cable, I could understand, but this is just, plain stupid.

    I wouldn't be surprised if we discover that there were a couple of well-placed phone calls involved...

    You do not understand this market. there are many place in US where people do not have choice. I am lucky, I have Comcast for all 3 services, I have Verizon, I have DirecTV and Dish, I can play them against each other for Video, but internet I have Comcast and VZ. Phone I have Comcast and VZ plus all the other third parties out there. Most places people only have one service along with Satellite if you have clear line of sight to the southwest. The issue is unless you get all three from VX or Comcast they really do not cut you a deal.

    Content cost drive the cost of your triple play services, the cost are being driven by content owners, and when the cable operators own the content they get to set the price to you and to their competitors. You can bet that Comcast does not charge as much to themselves for their content as they charge Directv.

    So many customer do not go elsewhere, you can cut of video content from Comcast, but they just up your internet costs to make up for the lost as you got to online services, but after to piece it all together, you bill is not much better than if you stayed where you were.

    Perhaps the justice department is just as confused as you.  Time Warner Cable isn't part of Time Warner.  Time Warner doesn't do Internet.  
  • Reply 19 of 27
    cpsro said:
    Somehow I just don't sense complete independence of the Judiciary Branch from the Executive Branch.
    Like when FDR told the SCOTUS to rule positively on his unconstitutional programs otherwise he’d expand the court and stack it with further traitors? Is that what you mean?
    SpamSandwich
  • Reply 20 of 27
    dysamoriadysamoria Posts: 2,138member
    "... bid to acquisition..." ???

    It is "bid to AQUIRE". "Acquisition" is a noun.
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