AT&T Lawyers Investigating Whether Trump Had Undue Influence On DOJ Merger Review

Legal Issues

from the cronyism-vs-cronyism dept

Given the Trump administration’s rubber stamping of every mono/duopolist desire (killing net neutrality, broadband privacy rules, media consolidation limits), most expected the AT&T Time Warner merger to see approval without much fuss. After all, while the problems caused by vertical integration deals like Comcast NBC Universal are very real, it didn’t seem likely that an administration running rough shod over consumer protections would give much of a damn. Especially given that Trump DOJ antitrust boss Makan Delrahim had already been on record stating he saw no problems whatsoever with the deal.

That’s why leaked reports that the DOJ was suddenly considering blocking the deal came as such a surprise. Said reports indicated that the DOJ was considering a lawsuit to thwart the deal unless AT&T was willing to divest either CNN-owner Turner broadcasting, or DirecTV — which AT&T acquired last year.

There are two generally-accepted theories as to what motivated the Trump administration to hamstring the deal, neither of which (unless you’re immensely gullible) involve actually caring about the very real negative repercussions the deal will have on telecom/media markets and consumers. One is that the Trump administration is simply getting vindictive revenge against CNN for its critical coverage of the president, a path one Trump administration official said was definitely on the table in a July report in the New York Times:

“White House advisers have discussed a potential point of leverage over their adversary, a senior administration official said: a pending merger between CNN?s parent company, Time Warner, and AT&T. Mr. Trump?s Justice Department will decide whether to approve the merger, and while analysts say there is little to stop the deal from moving forward, the president?s animus toward CNN remains a wild card.”

But there’s another motivation here for the Trump administration: doing a favor for Rupert Murdoch. Reports have indicated that Murdoch has been pressuring the Trump administration to block the deal since at least January, since the combined company would pose a greater competitive threat to his News Corp. empire. Reports more recently indicate that Murdoch approached AT&T at least twice in the last six months looking to convince AT&T to sell CNN, an idea AT&T isn’t interested in. In short, it’s very possible that Trump may be using the DOJ to force AT&T to make a deal with Murdoch.

AT&T lawyers clearly smell something fishy here, and the company quickly indicated it will be asking a court for any and all communications between the DOJ and the Trump administration. Not too surprisingly, AT&T’s inquiry will focus, in part, on the role Rupert Murdoch is playing in scuttling the deal:

“In the event of a trial over the $85.4 billion deal, AT&T intends to seek court permission for access to communications between the White House and the Justice Department about the takeover, said the people, who asked not to be named because the deliberations are private…AT&T will also try to get any evidence about whether Rupert Murdoch tried to influence the review, according to one of the people. Murdoch, a Trump confidant, controls 21st Century Fox Inc., the parent of Fox News. The president has praised Fox News?s coverage of his administration.”

The entire affair is just another indication that 2017 is simply too weird for words. Blocking the deal on antitrust grounds is the right thing to do to protect streaming markets from AT&T’s long, documented history of anti-competitive behavior. But is it still the right thing to do if the only real goal is to silence critical media voices while aiding a Trump ally’s own business ventures? Pick your poison.

Filed Under: antitrust, doj, donald trump, makan delrahim, merger
Companies: at&t