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Justice Department's Suit to Block AT&T-Time Warner Deal is Misguided

Today, the Department of Justice (DOJ) announced it is preparing an antitrust lawsuit to block AT&T’s merger with Time Warner. CEI experts in antitrust regulation have long held it often hurts consumers more than it helps them. Below is a roundup of thoughts from our legal and regulatory experts on this news:


Ryan Radia said the following about the DOJ’s announcement today. Click here for more commentary from him on this issue. 

The Antitrust Division’s complaint is misguided. The AT&T-Time Warner merger is a vertical transaction that wouldn’t reduce competition in any distinct market. Under established antitrust principles, the government will have a difficult time showing a court that the deal is likely to harm consumers. And for an administration that’s touted its efforts to cut unnecessary regulation, seeking to block a potentially beneficial merger is inconsistent with letting American businesses thrive and innovate.

Wayne Crews has spent 20 years exploring how: “[A]ntitrust laws hobble dynamic market processes, infringes on individuals, acts as a special-interest regulation, and the role government plays as the root of monopoly.” Read the Forbes piece he wrote on this deal back when it was first announced.

[O]nly government action, not the existence of big media outlets and potential new ones like AT&T-Time Warner, can obstruct citizen’s access to information—especially once the Internet was unleashed 20 years ago.

Indeed, centralized governmental restriction of media ownership—effectively limiting the size of microphones—is contrary to the very concept of democracy. An entity unleashing sweeping, cross-sectoral power to control of the size, structure, and trajectories of private media outlets is itself the monopoly, if concentration of power is really the concern of those who’ve commented on AT&T-Time Warner.

Most recent mergers are about television and online/streaming entertainment. But core ideas and debate can never truly be bottled up by “big media” in a free society, where government does not practice censorship. However, individuals do have plenty to fear from a government that believes it acceptable for politicians and bureaucrats to block or control media voices. Larger microphones create and spawn rivalry, and are themselves an exercise or implementation of free speech itself, not its enemy. Big media also activates social media responses, making broadcasters and “big media” voices out of all of us.

Just last week, CEI attorney Frank Bednarz wrote about the negative consequences of the Trump administration’s “hipster” approach to antitrust. Check out his piece on the AT&T-Time Warner news.

When federal agencies care strictly about consumer welfare, vertical integration like the AT&T merger will almost always be approved because, as Hal Singer discusses in detail, there’s little risk consumers would be worse off. Makan Delrahim, leader of Trump’s DOJ Antitrust Division, got it right last year: “This is more of what we call a vertical merger. ... I don't see this as a major antitrust problem.

However, when antitrust law no longer focuses on consumer welfare, and when vague hipster concerns about the bigness of firms are actionable, regulators have a free hand to demand conditions for political or personal advantage. While we might be concerned about media consolidation, antitrust enforcement generically aimed at “big business” is a gift to would-be tyrants.

As for the reported conditions on the AT&T merger, they seem misplaced in an age when anyone with a smartphone can be a content creator, and when new entrants like Netflix, Amazon, Hulu, and Disney are disrupting content distribution.