Proposed AT&T - Time Warner Merger


The United States of America filed a civil action on 11/20/2017 to prevent AT&T from acquiring Time Warner in a transaction whose effect “may be substantially to lessen competition” in violation of Section 7 of the Clayton Act.

AT&T is the largest provider of traditional subscription TV and Time Warner owns some of the country’s largest TV networks. The Department of Justice (DOJ) assumes that if the two companies merged, "AT&T/DirecTV would hinder its rivals by forcing them to pay hundreds of millions of dollars more per year for Time Warner’s networks, and it would use its increased power to slow the industry’s transition to new and exciting video distribution models that provide greater choice for consumers. The proposed merger would result in fewer innovative offerings and higher bills for American families.”

“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", AT&T’s Senior Executive Vice President and General Counsel David R. MacAtee II stated, likely referring to its rival Comcast's acquisition of NBC Universal.

With today's young people using so much social media, would the proposed megadeal stifle competition and harm consumers in the United States? What do you think?