Justice Department Urges Turner or DirecTV Sale as Remedy to AT&T-Time Warner Merger

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The Justice Department is urging a federal judge to block AT&T-Time Warner’s proposed merger or require a significant sale of assets, rather than impose “behavioral” conditions on the deal like an agreement to arbitrate disputes with distribution rivals. In its post-trial brief, the government says that US District Judge Richard Leon could allow the merger on the condition that it not include Time Warner-unit Turner networks, or that AT&T sell off DirecTV. It also said that it could prohibit AT&T from buying a controlling stake in Turner networks, meaning that AT&T could purchase a minority interest.

In the brief, the Justice Department takes aim at AT&T-Time Warner’s defense of its proposed merger, arguing that they “would have the court rewrite merger law.” They take specific aim at AT&T’s argument that they face a new competitive threat with competition from Facebook, Apple, Amazon, Google, and Netflix. The DOJ says that “for all their discussion of these companies, defendants have not explained how their successes with disparate offerings in different markets are relevant to the court’s analysis of the potential harm in the markets at issue here.” The DoJ says that AT&T-Time Warner seems “to be asking the court to find a new defense to an illegal merger: ‘we are getting killed by new competition in different markets.’ 


Justice Department Urges Turner or DirecTV Sale as Remedy to AT&T-Time Warner Merger