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At & T Merger Over Time Warner

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AT&T, one of the largest mobile carriers in the nation, has reached a deal to buy Time Warner for $85.4 billion dollars. This merger would include media giants like HBO, CNN, and Warner Brothers movie studios; all of which operate under Time Warner. In response to this, The United States Justice Department has sued AT&T in order to block the deal. While there are plenty reasons to be skeptical of this merger, a lot of the debate regarding this deal has come from the possible intervention from the Trump Administration. President Trump’s strong distaste for CNN, a division of Time Warner, is no secret and typically, a merger between two companies that are not direct competition to one another would not appeal to the US Justice system the way …show more content…

While Time Warner is interested in selling to attract streaming media audiences, AT&T is interested in buying to be able to offer more to current and potential customers, as they continue to compete with mobile carriers like Verizon, Sprint, and T-Mobile. Part of the mutual benefits of this deal would be creating targeted adverting from their shared consumer data, to sell at a higher rate. New York Times writes Michael Santorelli argues that “Combining AT&T [and] Time Warner is what economists and antitrust experts consider a classic vertical merger. Because the companies don’t compete, their combining would not alter the competitive landscape in either the telecommunications or entertainment industries.” (Santorelli) He explains that United States Justice Department typically deals with horizontal mergers between companies in the same industry therefore, there should be no reason to block the AT&T and Time Warner Merger. The trouble in this specific case comes with the intervention of politics. Prior to going to trial, the Department of Justice offered AT&T and Time Warner the option to sell Turner Broadcasting, the parent company of CNN, to approve the merger. Santorelli argues that this merger will provide new options for consumers as well as create new kinds of content without posing a great threat to existing

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Lawmakers now claim that they are looking out for the consumers’ and competitors’ best interests, so as not to hinder any competition or new innovations. Others have weighed in on the debate such as Senator David Perdue, who claimed that this merger is simply an example of capitalism. President-elect Donald Trump claims that this type of merger will be blocked. Lastly, consumer groups have rejected the portrayals of AT&T and Time Warner as being weaker rivals, claiming that the merger of these two companies will create a powerhouse that every network and cable company will need to compete and negotiate with, all while pushing out smaller streaming services such as Sling TV and Hulu. Consumer groups ultimately fear that this merger will extinguish new

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