December 14, 2018

U.S. Sues to Block AT&T-Time Warner Merger

“This merger would greatly harm American consumers,” Mr. Delrahim, the assistant attorney general for antitrust, said in a statement. “It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy.”

The complaint was filed in Federal District Court for the District of Columbia.

A Justice Department official, who spoke on condition of anonymity, citing the sensitive nature of the talks, said that the agency remained open to negotiating a settlement. To gain favor with the antitrust division’s favor, the official said, the companies involved would have to sell off some of their assets.

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ATT said it would defend the proposed deal in court.

“Today’s D.O.J. lawsuit is a radical and inexplicable departure from decades of antitrust precedent,” ATT’s general counsel, David R. McAtee, said in a statement. “We are confident that the court will reject the government’s claims and permit this merger under longstanding legal precedent.”

By moving to block the deal, the Justice Department embarked on perhaps its boldest effort to stop a merger since another ATT transaction: the telecom giant’s effort to buy T-Mobile in 2011.

ATT — led then, as it is now, by Randall L. Stephenson — had sought to gain scale by purchasing a smaller telecom competitor. The Justice Department, operating under the Obama administration, said that the proposed transaction would have drastically reduced competition in the market for wireless phone services.

Executives at ATT and Time Warner have argued that its proposed acquisition of Time Warner is a different animal, given that the two companies — unlike ATT and T-Mobile — are not rivals competing in the same sphere.

ATT has said it would vigorously defend the deal, arguing that the union would not reduce competition in the broadband or other media markets. Instead, the company said, it would create a company better equipped to fight powerful internet rivals such as Facebook and Google in the digital advertising and streaming market. In addition to its reach as a creator of content and as a distributor, the union of ATT and Time Warner would also create a powerful player in mobile video streaming and advertising.

In an interview earlier this month at The Times’s DealBook conference, Mr. Stephenson said that a significant merger like this had not been challenged in 40 years. He added that the company had been preparing to litigate its case since “Day 1.”

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