The Justice Department has weighed in now that the trial about AT&T’s proposed $85 billion acquisition of Time Warner has concluded, and it is asking the judge to force AT&T to sell off some of Time Warner’s most valuable assets.
In the DOJ’s post-trial brief, the agency said that AT&T should be required to divest either DirecTV, a pay TV provider with more than 20 million subscribers or Turner Networks, the group that owns CNN, TBS and TNT.
"The appropriate relief here is structural—either a permanent injunction of the proposed transaction, or a targeted divestiture," the DOJ wrote according to CNN. "The evidence at trial demonstrated that the bulk of the anticompetitive effects flow from the proposed combination of Turner with DirecTV."
Both DirecTV and Turner were central to the DOJ’s argument against the merger. The agency has alleged that if AT&T were able to own both, it would have too much leverage over its TV distributor rivals in carriage negotiations for Turner’s networks. The DOJ also argued that the merger would result in higher overall prices for U.S. consumers.
The presiding Judge Richard Leon has set June 12 for the hearing in which he’ll deliver his decision.
In its own post-trial brief issued last week, AT&T said that being forced to sell off either DirecTV or Turner would “destroy” the value proposition of the merger.
“Divesting DirecTV would eliminate the price decrease for millions of DirecTV consumers predicted by the government itself, and divesting Turner would eliminate the content innovations and the advertising benefits that put downward pressure on Turner prices. On this record, there is no basis to impose any remedies at all, much less divestitures that would destroy the value of the transaction,” AT&T wrote.
AT&T requested that no remedial judgments be placed on its acquisition of Time Warner.
As Judge Leon ponders the final arguments from both AT&T and the DOJ, AT&T is facing controversy over payments it made in late 2017 and early 2018 to Essential Consultants, a company created by President Donald Trump’s lawyer Michael Cohen. According to CNBC, AT&T paid Cohen $200,000 to provide “insights into understanding the new administration." It was Cohen’s Essential Consultants that made the $130,000 payment to actress Stormy Daniels to prevent her from publicly discussing an alleged affair she had with Trump.
AT&T told CNBC that Cohen “did no legal or lobbying work for us, and the contract ended in December 2017.”