AT&T may involve Trump, anti-trust chief in battle for Time Warner
16 February 2018
AT&T Inc is considering an unusual gambit in the coming trial over its $85-billion bid to buy Time Warner Inc - seeking testimony from the Justice Department's antitrust chief Makan Delrahim, who wants to block the merger.
In the months since the Justice Department sued to block the deal last November, AT&T has publicly questioned the department's motives in light of President Donald Trump's campaign pledge to disallow the merger and his repeated disparagement of CNN, a unit of Time Warner.
AT&T is pursuing an unprecedented strategy of injecting politics into the fight to salvage the takeover as it believes Trump and the head of the division, who previously worked at the White House and was appointed by Trump, discussed the transaction before the government sued to block the deal in November, according to multiple reports on Thursday.
The company is seeking communications between the department and the White House about the merger, and wants to put Delrahim, the head of the division, on its witness list.
The move carries potential risks and rewards. Evidence that Trump, a relentless critic of Time Warner's CNN and an opponent of the merger, pushed the Justice Department to sue would undermine the government's credibility. But Delrahim may welcome the chance to defend the case as a legitimate enforcement action that was filed without political influence.
Delrahim's case is based on a strong complaint that lays out how the combination will harm consumers, even though the lawsuit may seem politically motivated given Trump's criticism of CNN.
If approved, the merger would reshape the media landscape by uniting a telecom giant with the owner of CNN, Warner Bros, TNT, TBS and HBO. AT&T, the owner of DirecTV, is the largest pay-TV distributor, as well as a powerhouse in mobile phones and landlines. The Justice Department has argued that letting AT&T own the films and TV shows that flow down its pipes would harm consumers and competitors.
The White House and the Justice Department have denied Trump had any involvement in the review. Delrahim says the $85.4-billion merger would raise costs for consumers and reduce choice by combining AT&T's distribution channels with Time Warner's content. The lawsuit was a surprising setback to a deal that seemed on track for approval, just as Comcast Corp.'s prior purchase of NBCUniversal, which combined distribution and content, was cleared by the Justice Department.
Bloomberg reported in November that AT&T intended to dig into whether the White House influenced the decision to sue the companies. The New York Times earlier reported on AT&T's plan to put Delrahim on the witness list.
The dispute over AT&T's requests will probably become public Friday at a hearing in Washington before US District Judge Richard Leon, who is overseeing the case. Lawyers for both sides held a closed-door hearing with the judge Monday and declined to comment on what was discussed.