For those who feel the merger between AT&T and Time Warner is a dangerous consolidation of media power, today is bittersweet. The Department of Justice has decided to go forward with a lawsuit to block the merger. But if reports that the suit is motivated by the Trump administration’s desire to punish CNN for its coverage prove to be true, this could be a tough case to win.
Earlier this month, reports emerged that officials inside the Department of Justice were asking for CNN, which is owned by Time Warner, be excluded from the potential merger in exchange for allowing it to go unchallenged. The New York Times claimed that:
In one account of the meeting, Justice Department officials called on AT&T to sell Turner Broadcasting — the group of cable channels under the Time Warner banner that includes CNN — as a potential requirement for gaining government approval, according to three people from the companies involved, who spoke on the condition that they not be named because of the delicacy of the negotiations.
Trump has famously feuded with CNN since he became a presidential candidate in 2016. He relentlessly tweets his displeasure with the network’s coverage of his exploits in the White House, degrades CNN’s reporters to their face, and most famously tweeted a GIF of himself wrestling the CNN logo—the logo was fake, the wrestling match was “real” footage of Trump when he was an actual professional wrestler. He’s also spoken out about the deal in less personal terms, telling reporters, “AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration, because it’s too much concentration of power in the hands of too few.”
As far back as July, the New York Times was cited a senior administration official who claimed that White House advisers have discussed using the pending merger as a form of leverage against CNN. And most recently multiple outlets have run reports that Rupert Murdoch was “working behind the scenes” to push the Trump regime into killing the deal. Murdoch considers it revenge after Time Warner rejected his $80 million bid to acquire the company himself, according to Vanity Fair.
The administration has denied that it requested any sort of spin-off of CNN as a condition of the merger. Despite the fact that it would be pretty easy for AT&T to demonstrate that Trump, at least as an individual, has a bias against the deal, the DOJ has decided to move forward with a lawsuit.
In a statement sent to Gizmodo, AT&T strenuously objected to the decision. David R. McAtee II, AT&T’s Senior Executive Vice President and General Counsel, wrote:
Today’s DOJ lawsuit is a radical and inexplicable departure from decades of antitrust precedent. 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.
Our merger combines Time Warner’s content and talent with AT&T’s TV, wireless and broadband distribution platforms. The result will help make television more affordable, innovative, interactive and mobile. Fortunately, the Department of Justice doesn’t have the final say in this matter. Rather, it bears the burden of proving to the U.S. District Court that the transaction violates the law. We are confident that the Court will reject the Government’s claims and permit this merger under longstanding legal precedent.
Gizmodo has reached out to the DOJ for comment and we’ll update this post when we receive a reply.
This is a gut-wrenching case in which two media companies want to become even more dominant than they already are, and the administration is allegedly using backchannels to censor free speech. Neither party is a hero. The only good news is that the discovery process in court should be pretty interesting.