With AT&T case, US may chart new antitrust path

n challenging the huge AT&T-Time Warner merger, the Trump administration is reversing a decades-old antitrust policy in a politically charged case that could have implications for other big tieups, and potentially for dominant technology companies.

A lawsuit filed by the Justice Department sets up an epic court clash over the $85 billion deal, which aims to unite the vast television and film content from Time Warner with AT&T’s huge Internet and pay TV distribution network.

The deal “would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy,” said Makan Delrahim, head of the Justice Department’s antitrust division.

AT&T has defended the deal as a “vertical” merger of two firms without competitive overlap.

To make matters more complicated, the deal has put into focus a bitter feud between President Donald Trump and Time Warner’s CNN — which the White House has attacked repeatedly as a purveyor of “fake news.”

Trump expressed support for the lawsuit, reaffirming comments from the 2016 campaign opposing the merger.

“I’ve always felt that was a deal that was not good for the country,” the president said as he departed the White House.

To win the case in court, however, the government will have to overturn four decades of precedent on “vertical” deals, with no case heard since the 1970s.

“If the government does go to court, it’ll lose,” said Larry Downes, a Georgetown University legal scholar and analyst, writing in the Harvard Business Review last week. “For vertical mergers, the government hasn’t won a single court case.”

Downes said the case represents “a huge change in antitrust law,” with repercussions well beyond the media industry.

The case could be even harder to win because of Trump’s frequent barbs at CNN, Downes said, raising “freedom of the press issues and potentially illegal interference with what by law is an independent review.”

Maurice Stucke, a former Justice Department antitrust prosecutor who now teaches at the University of Tennessee, said there is nothing novel about the government’s case.

“You’re dealing with a really concentrated industry with few competitors,” Stucke said.

The government’s case is based on a tieup between one of the biggest distributors of content and a company that “controls musthave content in sports as well as some of the most desirable stations,” including premium cable channel HBO. his