In AT&T-Time Warner merger trial, US government wants CNN parent to be spun off
The Department of Justice wants AT&T to divest either DIRECTV or Turner Broadcasting if it goes through with its $85 billion takeover of Time Warner.
That’s what we learned in newly unsealed documents upon the conclusion of their federal trial. The government has gone against the telecom company for anti-competitive concerns, posing that the resulting company would create an unfair competitive advantage and drive prices higher — this in spite of the fact that the two parties work in different, non-competing industries and that courts have rarely ruled against mergers and acquisitions of this nature.
The Department of Justice says that while it is against the acquisition as a whole, the deal would be less of a threat to competition if Turner, which controls several TV channels, were separated from channel provider DIRECTV. Turner Broadcasting owns Cartoon Network, the Bleach Report, NBA TV, TBS, TNT, truTV and, most importantly, CNN. President Doanld Trump has been adversarial to the news network for what he perceived to be unfair media coverage throughout his political campaign and into his administration. AT&T acquired satellite television provider DIRECTV in 2015 and has integrated its services into sales packages combining landline and wireless services.
“Divestitures here would destroy the very consumer value this merger is designed to unlock,” AT&T stated in its case.
District Judge Richard Leon is expected to decide on the case June 12.