Why the Government is Right to Block the AT&T-Time Warner Merger

[Commentary] Despite what AT&T CEO Randall Stephenson thinks, the Department of Justice’s suit blocking AT&T from acquiring Time Warner’s assets in an $85 billion merger is a great moment for antitrust in America. It’s late, but it’s welcome.

AT&T hurt itself by failing to respect DOJ staff that learned key lessons from the giant merger of Comcast with NBCU in 2011: So-called "vertical" mergers between big content and transmission companies can have pernicious consequences for consumers, even if the merger does not remove a competitor from the field. The staff has gotten the message that, in this heavily concentrated, stagnant, and essentially noncompetitive marketplace, trying to smooth over illegal mergers with conditions and ongoing oversight doesn’t work. That’s why, informed by years of staff experience and frustration with Comcast/NBCU, DOJ’s antitrust head Delrahim has sued to block AT&T from completing its deal. DOJ has a very strong case. AT&T not only failed to address the department’s concerns, but also unintentionally provided ammo in the form of the company’s strategic statements over the years. The DOJ uses quotes from AT&T’s and DirecTV’s own internal documents to show that the merged company intended to use Turner’s top-rated, widely distributed content as a sledgehammer both (a) to raise prices for any other competing video distributor, so as (ultimately) to drive those distributors’ customers into AT&T’s arms, and (b) to slow competition from online video.

[Susan Crawford is a professor at Harvard Law School]