AT&T deal win setback for US justice dept
AT&T’s sweeping court victory allowing its takeover of Time Warner delivers a sharp setback to the Justice Department’s new approach to policing mergers under President Donald Trump and promises to spark a merger wave across industries.
The federal judge’s decision raises the bar for the government’s ability to challenge deals between companies that don’t compete directly. That opens a pathway for firms contemplating such deals, especially in media where distributors are racing to acquire content companies.
Comcast is expected to be the first out of the gate, making a formal offer for 21st Century Fox assets as early as Wednesday, according to a person with knowledge of the matter who asked not to be identified because the details are private.
At issue for Comcast and other companies is how antitrust enforcers will approach so-called vertical deals that unite companies operating in different parts of a supply chain rather than direct competitors. The Justice Department’s lawsuit against the Time Warner takeover marked an unprecedented challenge after years of a light-touch approach by enforcers in similar deals.
The Justice Department’s lawsuit, led by antitrust chief Makan Delrahim, came against a backdrop of criticism that decades of lax merger enforcement by the government has led to increased concentration across industries. By bringing the Time Warner case, Delrahim took a tougher stand, breaking with past practice of approving vertical deals after placing conditions on how companies operate. Instead, Delrahim demanded the companies sell business units — so-called structural remedies — to fix competition problems.
His defeat makes it unlikely he can continue to deliver on that strategy, said Chris Sagers, an antitrust law professor at Cleveland-Marshall College of Law.
“This is probably the end of meaningful vertical enforcement for a good long time,” Sagers said.
The US Justice Department’s lawsuit, led by antitrust chief Makan Delrahim, came against a backdrop of criticism