Antitrust Chief Airs Caution on AT&T Deal -- WSJ
November 17 2017 - 03:02AM
Dow Jones News
By Brent Kendall
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (November 17, 2017).
WASHINGTON -- The Justice Department's new antitrust chief made
clear Thursday he doesn't favor approving mergers based on
corporate commitments to refrain from particular conduct, another
potentially ominous sign for AT&T Inc.'s planned deal for Time
Warner Inc.
The issue has proved a key one in discussions between the
companies and the Justice Department, which is considering a
lawsuit against the deal.
The AT&T-Time Warner transaction is a vertical merger that
combines complementary companies instead of direct competitors. In
the past, the Justice Department has shown a willingness to approve
such deals, even if they raised competition concerns, so long as
the merging parties agreed to so-called behavioral remedies.
This happened, for example, when Comcast Corp. in 2011 won
approval to take control of NBCUniversal after promising to abide
by a range of conditions, including a requirement to offer its
content to online video distributors on reasonable terms.
Many analysts initially thought the AT&T deal would be
approved with similar conditions.
But Justice Department antitrust chief Makan Delrahim, speaking
at an American Bar Association conference Thursday, said there was
bipartisan agreement that behavioral conditions have often proved
to be inadequate.
Mr. Delrahim said such conditions were a form of government
regulation that the Justice Department was ill-equipped to impose,
and he criticized past antitrust enforcers for experimenting "with
allowing illegal mergers to proceed subject to behavioral
commitments."
The antitrust chief went on to note that some antitrust experts
have criticized the Comcast settlement.
Mr. Delrahim also offered an indirect shot at AT&T, even
though he didn't mention the company by name. He quoted from a
letter 11 Democratic senators sent to the Justice Department last
summer raising objections to the AT&T-Time Warner deal.
His remarks came a week after he offered indirect pushback on
AT&T during a public appearance in California.
During a recent meeting, the Justice Department told AT&T it
would need to offer structural changes to its transaction to win
government approval, such as selling off Time Warner's Turner
Division, which includes several popular channels like CNN, TBS and
TNT. The department also said AT&T could consider divesting its
DirecTV satellite arm, or perhaps offer other solutions.
AT&T has been resistant to making significant changes to its
deal.
The Justice Department believes the deal could give AT&T too
much leverage over competitors and harm consumers, according to
people familiar with the matter. Its decision on whether to file a
lawsuit could come within days.
AT&T argues the department's concerns are misguided,
especially in an age when online TV packages offer consumers more
ways than ever to access entertainment. The company says its deal
would help make film and TV more affordable.
An AT&T spokesman declined to comment on Mr. Delrahim's
speech.
Write to Brent Kendall at brent.kendall@wsj.com
(END) Dow Jones Newswires
November 17, 2017 02:47 ET (07:47 GMT)
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