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AT&T to Fight DOJ’s Move to Block Carrier’s Acquisition of Time Warner

AT&T to Fight DOJ’s Move to Block Carrier’s Acquisition of Time Warner

The last few months have seen AT&T looking to close its acquisition deal of Time Warner for a sum of $85.4 billion. The United States Department of Justice, however, is having none of it -- the DOJ is reportedly filing a lawsuit to block the major US wireless carrier’s move, effectively preventing a union of a telecoms giant and a digital media empire.

It is no secret that AT&T,  the number two biggest mobile operator in the country (second only to Verizon Wireless), has big plans to further expand its digital media business. The carrier had entered into digital media with the acquisition of DirecTV about a couple of years ago (to the tune of $48.5 billion). As a matter of fact, both industry leaders Verizon and AT&T have grand ambitions to build their respective media empires. The Big Red had previously acquired AOL back in 2015, before moving on to buy Yahoo (for a sum of $4.83 billion). With consumption of media ever growing among today’s mobile users, the two wireless giants are clearly aiming to attract more subscribers by pairing video and entertainment packages with their mobile service offerings.

This is why AT&T is preparing to put up a fight. As explained by David McAtee, the general counsel of AT&T, the Department of Justice’s move to file a lawsuit is tantamount to an outrageous departure from previous practices. A merger between a wireless carrier and a digital media giant could only result in a wider range of options for consumers, and does not in any way compromise healthy competition. 

As stated by Makan Delrahim, the new head of the Department of Justice’s antitrust division, a tie up between AT&T and Time Warner would grant the combined business entity too much power. The lawsuit filed by the DOJ marks the first major antitrust enforcement action made by President Donald Trump’s administration. As recently as a few weeks ago, industry watchers had expected the merger deal to be approved by regulators. 

But how quickly things have changed since Delrahim became the new head of the DOJ’s antitrust division. Randall Stephenson, the chief executive officer of AT&T, agrees. Stephenson explains that when the merger was announced, the brightest legal minds in America had all agreed that the deal would close, due to the fact that AT&T and Time Warner are not direct competitors with each other. Stephenson further describes the Department of Justice’s lawsuit as totally unprecedented.