Why a DOJ vs. AT&T-Time Warner Case Could Be a Close Call

If the Justice Department sues to block AT&T's planned acquisition of Time Warner, the challenge will likely raise novel legal issues, making one of the most ambitious antitrust cases in decades hard to handicap. In the typical merger case, the government challenges a proposed combination of two companies that directly compete. But the proposed AT&T-Time Warner deal is a so-called vertical merger of complementary businesses: AT&T’s cable, wireless and satellite distribution with Time Warner’s popular content, including its offerings on HBO and Turner networks like CNN, TBS and TNT. The government at times has raised concerns about vertical deals, but it hasn’t litigated one in decades, meaning a lawsuit against AT&T would require a judge to confront legal issues that courts haven’t faced in recent memory. Legal observers said there are several arguments the government could pursue in a lawsuit—and several defenses AT&T could make.