Wednesday , February 14, 2018 - 10:25 AM
(c) 2018, Bloomberg.
AT&T wants to show political tampering as it seeks evidence about whether President Donald Trump influenced the Justice Department’s decision to sue to block the company’s proposed acquisition of Time Warner Inc.
AT&T wants communications between the Justice Department and the White House about the Time Warner takeover, according to a person familiar with the matter. It’s also looking to put the head of the Justice Department’s antitrust division, Makan Delrahim, on the witness stand at trial, the person said.
If approved, the deal 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.
AT&T’s move attempts to highlight how the White House may have pulled some strings in the first major antitrust action brought by Trump’s Justice Department. The lawsuit, which is set to go to trial March 19, has sparked speculation that Trump, a relentless critic of Time Warner’s CNN, pushed the department to oppose the deal.
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.
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 call Delrahim as a witness.
The dispute over AT&T’s requests will probably become public Friday at a hearing in Washington before U.S. 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.
AT&T and the Justice Department declined to comment on Wednesday.
The Justice Department sued to block the merger, in November saying it was harmful to consumers, handing AT&T a surprising setback to a deal that seemed on track for approval similar to Comcast Corp’s prior purchase of NBC Universal.
AT&T immediately responded to the lawsuit, vowing to fight the case in court and calling out Delrahim’s change of tone, pointing to comments he’s made over time on the deal.
“I do want to address the elephant in the room here,” AT&T Chief Executive Officer Randall Stephenson said at the time. “There’s been a lot of reporting and speculation, whether this is all about CNN. And frankly, I don’t know. But nobody should be surprisedthat the question keeps coming up, because we witness such an abrupt change in the application of antitrust law here.”
Delrahim, who had served as in the Justice Department’s antitrust division under President George W. Bush, commented during a Canadian TV interview on the Time Warner deal shortly after it was announced in late 2016.
“Just the sheer size of it and the fact that it’s media, I think will get a lot of attention. However, I don’t see this as a major antitrust problem,” Delrahim said, months before he was put in charge of the antitrust division.
Since taking the top antitrust job, Delrahim has positioned himself as an aggressive enforcer who wants to bring sweeping change to the way the agency handles mergers. One of his strongest positions is a dislike for the traditional practice of approving mergers if the companies promise to adhere to certain conditions.
Delrahim’s decision to draw that line with the first major cross-industry merger pits him against an army of well-paid AT&T lawyers and decades of approval decisions that hinged on conditions.
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