Judge rejects AT&T inquiry into possible Trump influence in merger case
A federal judge overseeing the Justice Department’s lawsuit against the AT&T–Time Warner merger rejected AT&T’s request for records of communications between the agency and the White House.
AT&T had been preparing to argue in the upcoming trial that President Trump’s animus toward CNN, a Time Warner subsidiary, had influenced prosecutors’ decision to bring a case against the $85 billion deal.
“We respect the judge’s decision and look forward to the upcoming trial,” Daniel Petrocelli, the attorney for AT&T and Time Warner, said in a statement.
The order is a major win for the Justice Department, which had called the argument a “sideshow,” and a setback for AT&T, which had attempted to use Trump’s attacks on CNN to its advantage.
“We are pleased with and respect today’s decision, which will permit the parties and court to focus on the case at hand,” said Kerri Kupec, a spokeswoman for the Justice Department. “This case has always been about protecting consumers from competitive harms, and we look forward to presenting our case at trial on March 19.”
Judge Richard Leon wrote in his decision on Tuesday that AT&T had failed to prove that the government had unfairly singled out the merger in suing to block it.
The Justice Department had handed over a log of communications between its antitrust division and the White House that referenced the merger, and Leon wrote that there was nothing “untoward” in those documents.
AT&T asked Leon to force the Justice Department to produce similar logs of communications between the White House and Attorney General Jeff Sessions’s office, and between Sessions’s office and the antitrust division.
The White House, Sessions and Makan Delrahim, the Justice Department antitrust chief, have all denied that prosecutors were swayed by Trump or that the lawsuit is politically motivated.
Prosecutors say that combining AT&T’s massive network with Time Warner’s programming assets could prove disastrous for competitors across multiple sectors, hamper innovation and hurt consumers when it comes to pricing and access to entertainment.
AT&T argues that the Justice Department’s decision to bring a case was a radical departure from its recent history of handling similar vertical mergers. Those include Comcast’s purchase of NBC, which prosecutors green-lighted in 2011 after attaching a number of conditions to the deal.
Leon, who also presided over the negotiations between the Justice Department and Comcast, wrote that a number of factors distinguished the two deals, including the fact that the Federal Communications Commission helped oversee the Comcast merger but is not involved in the AT&T review.
“So while it may, indeed, be a rare breed of horse, it is not exactly a unicorn!” Leon wrote.
The Justice Department sued to block the deal in November after negotiations between Delrahim and AT&T exploded into public view with conflicting media reports about whether the government wanted CNN’s parent company to be sold off from the combined corporations as a condition for merger approval.
That ignited scrutiny and speculation over whether Trump’s feud with the cable network was driving regulators’ approach to the merger review.
During a press conference following the filing of the lawsuit, AT&T CEO Randall Stephenson referred to the possibility of political interference from the White House as the “elephant in the room.”
“Frankly, I don’t know,” Stephenson said. “But nobody should be surprised that the question keeps coming up.”
Delrahim has maintained that his office is independent and he has argued in favor of regulators being more proactive in blocking potentially illegal mergers. In a speech in November, he promised to crack down on questionable vertical mergers, criticizing the Obama administration’s approach to handling deals like Comcast-NBC.
Since taking office, Trump has repeatedly lashed out at CNN, often taking to Twitter to criticize the outlet and call its coverage of him “fake news.”
In 2016, on the campaign trail, he came out against the AT&T-Time Warner merger, warning that it would concentrate too much media power under one roof.
He’s also made veiled threats about antitrust action against Amazon, whose owner Jeff Bezos controls The Washington Post — another media outlet that Trump has singled out.
“Is Fake News Washington Post being used as a lobbyist weapon against Congress to keep Politicians from looking into Amazon no-tax monopoly?” Trump tweeted in July.
The AT&T case will begin on March 19 and could last for nearly a month.
Updated: 4:55 p.m.
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