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 22, 2017).
WASHINGTON -- The Justice Department's new antitrust chief,
Makan Delrahim, needed just seven weeks to land himself in the
middle of the biggest antitrust case in 20 years.
Mr. Delrahim, confirmed by the Senate Sept. 27, made the
decision to file the government lawsuit Monday challenging AT&T
Inc.'s planned acquisition of Time Warner Inc. The antitrust
division he leads alleged that the vertical combination of
AT&T's video distribution with Time Warner's popular cable
programming would give the merged firm the power to raise prices
and hinder competitors and innovation.
AT&T criticized the government's arguments as unreasonable
and inconsistent with past practice, which has focused primarily on
horizontal mergers between direct competitors. It called President
Donald Trump's repeated criticisms of Time Warner's CNN the
"elephant in the room" in the Justice Department's case, raising
questions about political influence.
Mr. Trump criticized the deal on the campaign trail last October
when it was announced, and criticized it again Tuesday.
"Personally, I've always felt that that was a deal that's not good
for the country," he told reporters at the White House.
The Justice Department said the White House had no role in the
decision to sue.
The dispute has set the stage for a major court battle in
Washington, the highest-profile antitrust case since the Justice
Department sued Microsoft in 1998 on allegations of unlawful
monopolization. Microsoft Corp. avoided a breakup of its business
but agreed to restrictions on its business conduct.
AT&T Chief Executive Randall Stephenson said the new lawsuit
threw the business world into a state of uncertainty about what
types of deals and investment are permissible.
Mr. Delrahim, reached by phone, declined to comment on the
specifics of the case. But asked about Mr. Stephenson's comment
that the lawsuit renders companies unable to know what activity
they can engage in, Mr. Delrahim offered a one-word response:
"Compete."
Mr. Delrahim, 48 years old, and his family immigrated to the
U.S. when he was 9, at the time of the Iranian revolution. He spoke
no English when he arrived. He spent his teenage years in
California and graduated from the University of California, Los
Angeles, and got his legal degree from the George Washington
University Law School.
He developed an interest in patent and antitrust law, as well as
an interest in Republican politics.
He spent five years as a staffer to Sen. Orrin Hatch (R., Utah)
on the Senate Judiciary Committee, working among other things on
legislation that updated the federal law governing what
transactions must be submitted for government antitrust review.
Mr. Delrahim moved to the Justice Department's antitrust
division from 2003 to 2005, during the George W. Bush
administration. During that stint as a department lawyer, he led an
investigation into complaints of alleged anticompetitive practices
at Clear Channel Communications' radio and concert businesses. The
department later closed the probe after the company spun off its
concert arm into the separate Live Nation entity.
Separately, Mr. Delrahim served on a bipartisan commission
created by Congress to study the modernization of antitrust laws.
He spent more than a decade in private practice after his first job
at the Justice Department.
Mr. Delrahim in an opinion article last year said Mr. Trump
wasn't his first GOP choice for the White House, but he urged
Republicans to support Mr. Trump's candidacy, arguing the direction
of the Supreme Court was too important to leave to Democrat Hillary
Clinton.
After Mr. Trump won the presidential election, Mr. Delrahim
joined the White House as a deputy counsel, where he was a key
figure in the administration's high court nomination of Neil
Gorsuch. Around the time Justice Gorsuch was confirmed in April,
the president nominated Mr. Delrahim for the Justice Department
antitrust post. The Senate confirmed him on a 73-21 vote.
Some Democrats, most prominently Sen. Elizabeth Warren (D.,
Mass.), argued Mr. Delrahim would be too friendly to corporations,
but others offered their support, believing he would bring cases.
That prediction quickly has proven correct.
"I always found him to be an energetic and creative guy. He
wasn't there just to warm a seat," said Washington antitrust lawyer
Seth Bloom, a former Democratic staffer on the Senate Judiciary
Committee who worked with Mr. Delrahim.
Other people under consideration by the Trump administration for
the antitrust post included Joshua Wright, a vocal conservative on
antitrust matters and former member of the Federal Trade
Commission.
Mr. Wright, now a professor at George Mason University and a
private practice lawyer, on Tuesday said he wasn't a fan of the
AT&T suit, saying it lacked "a sound theoretical foundation and
economic evidence" and was unlikely to prevail in court.
President Trump's continued criticisms of CNN, and his pledge as
a presidential candidate to block the AT&T-Time Warner deal,
are sure to hang over the case.
AT&T had previously avoided the CNN issue. As late as Nov.
9, Mr. Stephenson said he had "no reason to believe" that Mr.
Trump's dislike of CNN had affected the Justice Department's work.
That tone changed after the lawsuit Monday, when Mr. Stephenson
explicitly raised the question of whether the Justice Department's
challenge was "all about CNN."
The company also is highlighting a television interview Mr.
Delrahim gave last year as a private practice lawyer in which he
said the transaction didn't appear to raise major antitrust
concerns. In the same interview, Mr. Delrahim said the deal could
raise "some concerns and antitrust issues of one distributor owning
various content, and it might somehow impact other
distributors."
Mr. Delrahim's defenders have said his television remarks were
the kind of armchair analysis lawyers frequently provide to
reporters after merger announcements, before a factual record has
been developed by a government investigation.
The new antitrust chief has said repeatedly that his decision
making wasn't influenced by the White House.
"I can't get any more clear than that," Mr. Delrahim said at a
Nov. 10 public appearance in California. Some people may try to
inject politics into an antitrust review, he said, but "I've got to
keep my nose down, be a law enforcer, do what's good [for] the
American people."
--Drew FitzGerald contributed to this article.
Write to Brent Kendall at brent.kendall@wsj.com
(END) Dow Jones Newswires
November 22, 2017 02:47 ET (07:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Time Warner (NYSE:TWX)
Historical Stock Chart
From Aug 2024 to Sep 2024
Time Warner (NYSE:TWX)
Historical Stock Chart
From Sep 2023 to Sep 2024