You are here: Home » Reuters » News
Business Standard

U.S. Justice Department, AT&T spar over merger in final pre-trial documents

Reuters  |  WASHINGTON 

By and David Shepardson

WASHINGTON (Reuters) - The and Inc on Friday presented starkly different futures for if the wireless and pay-TV giant is allowed to buy Inc, as they laid out their cases for a blockbuster antitrust trial.

The judge's decision is crucial to the future of both companies and will likely determine how aggressive Republican-controlled antitrust regulators will be in coming years. U.S. opposes the deal, and critics want to know if Trump's antipathy for Time Warner's network influenced regulators.

In their final briefs before the trial opens on March 19, the two sides disagreed on whether the $85 billion deal would harm rivals in pay television or and sparred over whether consumers would pay more because of the planned merger.

The Justice Department filed a lawsuit in November to stop AT&T, which owns and other products with 25 million subscribers, from buying and TV Time Warner, which owns and CNN, among many other channels.

It argued the deal would mean higher prices for rival cable and distributors and for consumers.

Investors and company executives had been expecting more leeway in mergers with a that vowed to reduce government regulation. The outcome of the case could affect other pending vertical mergers, in which different parts of a supply chain, rather than rivals in the same business, join together. Corp wants to buy and Corp wants to acquire Inc.

"If the Justice Department loses to in court this will substantially raise the barriers to the Justice Department bringing another vertical challenge such as with respect to CVS/or Cigna/Express Scripts," said Seth Bloom, a veteran of the Justice Department now in private practice.


The Justice Department used economic modeling to show that consumers will pay their provider more for content, if U.S. allows the deal.

"The acquisition would give a new tool to slow down the development and growth of in the future," the department added in its brief. "can profess it wants to lead the charge to the future, but its internal documents reveal a less attractive reality."

For its part, said the merger would result in "more than $2.5 billion in annual synergies by 2020 and more than $25 billion in total synergies on a net present value basis."

and said prices would not rise because the company would compete with newer companies like , , and Netflix Inc.

"Nothing will be withheld from competitors; consumer prices will not go up," the companies said, arguing the lawsuit itself was holding back consumer access to better products.

On Thursday, 11 former Justice Department officials ranging from Preet Bharara, a former U.S. attorney, and John Dean, Richard Nixon's during the Watergate scandal, urged Leon to reconsider his refusal to allow to demand communications between the and Justice Department about the merger probe.

(Reporting by and David Shepardson; editing by and Lisa Shumaker)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, March 10 2018. 14:15 IST