Antitrust

A Personal Grudge May Change The Direction Of Antitrust Law

This is (potentially) awful.

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There are lots of good reasons to be concerned about the proposed merger between AT&T and Time Warner. Many Democratic senators oppose the combination on the basis that more media consolidation is likely to have negative impacts on consumers, including higher prices and fewer choices. Indeed, in a move that broke with Beltway Republicans, on the campaign trail, Donald Trump even spoke out against the proposed merger, calling out the “concentration of power” the deal would represent.

Despite those concerns, prevailing wisdom has been that this merger, like so many vertical acquisitions of the recent past, will be approved. CNBC even suggests the deal could close within the next 60 days.

But perhaps you’ve forgotten our president is a thin-skinned, petulant child.

Now that he’s gotten himself in a spat with CNN (parent company: Time Warner) there may be more than just a populist bent to Trump’s opposition to the merger. Yup, according to a New York Times report, the president is looking into using the antitrust laws to get a leg up in his personal media grudge match:

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.

Holding out even the threat of blocking the merger in order to get personal concessions — especially against the Fourth Estate — is beyond the pale. I have to believe the career staff at the DOJ will not allow this to impair their analysis of the deal, but leaking that such a move is even on the table is outrageous. It is clearly calculated to have a chilling effect on the network, despite CNN president Jeff Zucker’s assurances it is not impacting their journalistic integrity:

Mr. Zucker, who was ousted as chief executive of NBCUniversal after that company merged with Comcast, declined to comment on the pending deal, except to say that the merger had not affected his journalistic or management choices. “It’s not something I think about,” he said, adding that he had not discussed the proposed acquisition by AT&T with Jeffrey Bewkes, the chief executive of Time Warner.

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Actually stopping the deal from going forward is a move that will probably not be successful — Politico has industry experts to assure Trump really won’t be able to wield the power of the presidency in service to a personal vendetta:

“Just because you don’t like CNN doesn’t mean you can block a merger,” said Rich Greenfield, a media and tech analyst at the investment research firm BTIG. “You still need a legal basis, and calling CNN ‘fake news’ or ‘FNN’ doesn’t make the transaction illegal.”

….

“I don’t think that blocking [the deal] is really a credible threat,” said economist Hal Singer, who studies antitrust and media issues and has testified before Congress. “I think the most you could do is extract some sort of concessions as to the merged entity’s dealings with independent networks and rival distributors.”

That is (somewhat) comforting, but your outrage is not misplaced. It is still necessary to be vigilant against these unprecedented uses of power to ensure they don’t become commonplace, even if it seems unlikely they’ll truly be utilized. Remember it wasn’t that long ago that the notion of a sentient Cheeto as leader of the free world was so afield of prevailing wisdom as to be the butt of jokes. But, well, here we are.

headshotKathryn Rubino is an editor at Above the Law. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

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