AT&T/TW: Merger ‘pro-consumer’
November 29, 2017
By Colin Mann
AT&T and Time Warner have submitted a joint court filing arguing that their proposed $85.4 billion (€78.5bn) merger is “pro-competitive” and “pro-consumer”, seeking to refute claims by the US Department of Justice (DoJ) that the deal breaks antitrust law and would substantially lessen competition, resulting in higher prices and less innovation for millions of Americans. They also argued that the government was wrong to worry that the deal would hamper the development of online video.
According to the DoJ complaint, which was filed in the United States District Court for the District of Columbia, the combined company would use its control over Time Warner’s valuable and highly popular networks to hinder its rivals by forcing them to pay hundreds of millions of dollars more per year for the right to distribute those networks. The combined company would also use its increased power to slow the industry’s transition to new and exciting video distribution models that provide greater choice for consumers, resulting in fewer innovative offerings and higher bills for American families.
According to the pair, they operate in highly competitive markets which will remain competitive after they close the deal. “While incumbent cable companies continue to lead in the delivery of television programming to homes across the country, massive digital platforms are harnessing the power of vertical integration to bring premium video content directly to consumers’ Internet connected TVs, phones and tablets,” they argued in the filing, adding that Apple, Google, and Facebook, with billions of users and a combined market capitalisation of more than two trillion dollars, were likewise investing billions of dollars in their own video offerings.
“Against this backdrop, the proposed merger of AT&T and Time Warner is a pro-competitive, pro-consumer response to an intensely competitive and rapidly changing video marketplace,” they asserted, arguing that the transaction “presents absolutely no risk of harm to competition or consumers”.
The trial will be heard by Judge Richard Leon at the US District Court for the District of Columbia.