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Government’s Antitrust Review of Time Warner-AT&T Merger Could Be Used as Leverage in Trump/CNN Feud

AT&T’s $85 billion proposal to acquire  Time Warner, the media and entertainment conglomerate that owns CNN, HBO, and others, has been submitted to the government for antitrust review. Given the tension between CNN and US President Donald Trump, many fear that the White House will use the review process as political leverage against the news network.

However, Makan Delrahim, whom Trump appointed as head of the antitrust division of the Department of Justice, has said he does not see any significant dangers in the bill. If the bill does not violate any antitrust regulations, the Trump administration will have no legal avenue by which to impede it.

Economist Hal Singer, who specializes in antitrust and media issues, says he does not believe the Trump administration can make any “[legally] credible threat” to block the deal.

“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,” he said.

AT&T, along with many economists, has argued that the deal would be a “vertical merger” because AT&T and Time Warner occupy different sectors of the industry, and are not direct rivals. Therefore, the merger would not pose a threat to market competition.

Some disagree. Oregon Senator Ron Wyden told POLITICO he has “serious concerns about the…merger because it stands to reduce consumers’ choices while increasing their costs.”

During a campaign in which he repeatedly bashed CNN, Trump pledged to block the AT&T-Time Warner merger, calling it “an example of the power structure I’m fighting.”  Whether the “power structure” Trump refers to is corporate consolidation or the news media is up for debate.

Trump has taken a number of steps to reduce government intervention in the free market. The administration has eased regulations in the financial sphere, for instance, that checked the growth of banks.

So the president’s stance on the Time Warner deal is something of an aberration, and some wonder whether Trump’s opposition to the merger is motivated less by a desire to protect market competition than by an agenda to silence unwelcome voices in the media.

On Sunday, Trump posted a video on Twitter which shows him repeatedly punching a CNN logo superimposed upon a man’s head. The president did not include text with the video, but appended the hashtags “#FraudNewsCNN and #FFN” to his tweet.

When asked about the video at a news conference in Poland Thursday, Trump said that CNN has covered his presidency in a “very dishonest way,” “has been fake news for a long time,” and has “serious problems.”

So there is question as to whether Trump’s administration will impartially consider the merger request.

Minnesota Senator Al Franken, a Democrat who has reservations about the merger, recommends that an “independent antitrust division” evaluate AT&T’s proposal so that Trump’s “war against the media [does] not influence the transaction.”

Wyden encourages the reviewers of the proposal to consider the effect the deal would have on the business market, not the president’s personal agenda. To allow Trump’s attitude toward the media to influence the decision “would be illegal, and flies in the face of the First Amendment [proteting freedom of speech and of press],” he says.

According to The Financial Times, Trump’s transition team “reassured AT&T” in December that the merger request would be “scrutinized without prejudice.”

Time Warner subsidiaries like CNN would remain autonomous under the merger: AT&T CEO Randall Stephenson says his company is “committed to continuing the editorial independence of CNN.”

Hopefully, Mr. Trump and his administration share that commitment. Even if they do not, they may find it difficult to find substantial legal grounds to justify blocking the merger.

Featured image via Flickr/Gage Skidmore

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