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AT&T, TimeWarner and CNN: What You Need to Know

Trump's war on news network muddies debate, but IU antitrust specialist says legal issues are complex

(BLOOMINGTON, Ind.) - The Justice Department is raising eyebrows with reports it's demanding AT&T sell CNN to get approval for its merger with the network's parent company:

AT&T denies any pressure to sell Turner Broadcasting to get its merger with TimeWarner approved. But the company says it's prepared to sue if antitrust regulators reject the deal.

IU Maurer School of Law Professor Shana Wallace, a former Justice Department antitrust investigator, says the test for any merger would be whether it restricts competition. That normally applies to a "horizontal merger" of direct competitors, such as Indianapolis-based Anthem's failed merger with rival health insurer Cigna. AT&T claims a "vertical merger" hasn't been blocked in 40 years. 

But Comcast's vertical merger with N-B-C required a consent decree in which the company agreed not to restrict rival programming on its platforms. Wallace says there have been "hiccups" in enforcing that settlement, and says the AT&T merger raises similar concerns about TimeWarner-owned programming -- including CNN, TBS, and the Cartoon Network -- having advantages over rival programming on AT&T networks.

Wallace acknowledges President Trump's frequent attacks on CNN have raised suspicions about reports the Justice Department has given AT&T a choice of selling either Turner or its DirecTV unit to win approval. Reports as far back as July claimed the White House was pondering whether the merger could give it leverage. But while Wallace says she can't rule out the possibility, she says it's highly unlikely the merger decision would be affected by CNN's coverage or Trump's criticism of it. She says the antitrust division is staffed by veteran attorneys, and the review of the TimeWarner merger began in the final months of the Obama Administration, with senators in both parties voicing concerns about it.  

Wallace says the review process gives the companies opportunities to explain why consumers wouldn't be hurt or would receive other benefits. And the Justice Department must assemble a written legal justification for its eventual decision.

The Justice Department can either set conditions of conduct to approve a merger, require the selloff of a business unit, or simply approve or deny the merger outright. Any conditions for approval, or an AT&T challenge to a rejection, would have to be reviewed by a judge, with the burden on the Justice Department to prove its case.

(Photo: Brian A. Jackson/Thinkstock)

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