The federal judge yesterday approved the $ 85 billion AT & T for Time Warner, a huge telecom giant victory that could lessen the ambitions of US regulators trying to block large corporations.
The case – one of the most watched antitrust tests for decades – is considered a bellwether for other pending awaiting agreements. From Comcast’s offer to the acquisition of Aetna by CVS 21st Century Fox, massive corporations have increasingly sought to expand their operations by buying companies in various industries. The judge’s decision, which allows AT & T to merge with Time Warner without conditions, shows that the federal government can try to fight these mergers.
Amazon, Facebook and Google
“I think business will generally be considered green for a merger, I think you’ll see a lot of people using it as an opportunity to try to get the merger they might think,” said Ed Black, chairman of the Computer Industry Association and Communications, a business group in Washington DC, which represents companies such as Amazon, Facebook and Google
Federal judge Richard Leon said the Justice Department, whose chairman of antitrust policy Makan Delrahim brought a rare case, did not provide enough evidence that the deal would harm competition or consumers. He also warned the United States government to file an appeal if it were to seek an agreement, although the DOJ did not take further action.
At AT & T, however, this is the main prize: the front of the entertainment world. The decision means that the telecom giant now controls highly sought-after programming – including Game of Thrones, Harry Potter and CNN film franchises – as well as the infrastructure that transmits this content to tens of millions of living rooms of TVs and smartphones. In addition to the wireless network and Internet services, AT & T acquired $ 67 billion in DiretTV in 2015, which also had the blessing of government regulators.
Prior to the ruling, public interest lawyers expressed deep concern that the AT & T victory will only speed up the rapid consolidation of the media, telecommunications and technology industries.
Everyone is looking at what’s happening in the entertainment, “said Gene Kimmelman, president of public knowledge.” But if Google and Facebook get a signal, the court will not allow the government to block vertical transactions, then there are open doors, news agencies, multiple messaging firms, and more data collection companies. I think what you see is that everyone is expanding in their space.
Under no circumstances will the consumer benefit either shape or form. I believe it will lead to higher prices, “said Gigi Sohn, former chief advisor to the Federal Communications Commission under former President Barack Obama.” He is already managing what people see and hear because of their cable systems. Now they can do the same thing in broadband … [and] prefer their Time Warner programming. ”
The decision represents a tremendous loss for Makan Delrahim, the incumbent president of Trump, an antitrust regulator. The Justice Department has not lost an antitrust case since 2004, and before the lawsuit, the AT & T Agency did not make a vertical agreement from Nixon. In his statement, Delrahim said he was “disappointed” in his decision and said his department “will consider further steps with respect to our commitment to protect competition.”
At&t time warner decision
Months before Trump nominated the leading antitrust office of the Justice Department in 2017, Delrahim even expressed the openness of the combination of AT & T and Time Warner, and in an interview for Canadian television he predicted he would not have to raise any regulatory concerns. However, Trump has repeatedly fired a merger, for which he is in no way opposed to his opposition to CNN, which Time Warner owns. Delrahim claimed that the White House was not in charge of how to handle the transaction.
The White House did not respond to the request for comment.
The US government has rarely invoked the so-called “Vertical Merger”, such as AT & T’s Time Warner bid, because they are companies trying to enter new industries.
The Federal Trade Commission, the government is another anti-monopoly agency, driven by extensive exploration of Amazon.com, for example when the e-commerce industry tried to buy the entire Food Food chain in 2017. (The Amazon Executive Director Jeffrey P. Bezos owns The Washington Post.) The FTC is now working on CVS’s vertical merger with Aetna, an agreement now expected by analysts.
However, the Ministry of Justice losses could be extended to other types of mergers, for example, when companies try to absorb competitors in the same sector – transactions known as horizontal agreements. The upcoming example is the upcoming merger by Sprint and T-Mobile, a combination of the third and fourth largest wireless companies of $ 26 billion.
These companies argue when they announced the agreement in April that the only way to build a new generation of wireless networks and to keep industry competitive is to join forces. A person familiar with Sprint’s and T-Mobile’s ideas, though not authorized to talk about the record, suggested that companies would like to point out the victory of AT & T as they are trying to sell their mergers to antitrust regulators in the coming months.
“It really makes AT & T and Verizon work better,” the person said on the merger. “It will enable T-Mobile to compete in areas or sectors that have not really done today.