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| Christian Hansen for The New York Times |
Summary: In October of 2016, AT&T agreed to buy Time Warner for $85 billion. The two companies have come to agreement to position this move as a merger of two complementary companies. However, critics are assuming this action can hurt non-AT&T users by increasing prices or limit access to media content. The DOJ is using this argument to further reveal that AT&T will have the ability to charge more for the viewing of valuable programming like the N.C.A.A. men's basketball tournament, which is broadcasted as a large part on Turner's networks. Nonetheless, AT&T continued to argue that the merger is "Not about making Time Warner programs less accessible or more expensive. Just the opposite: It is about making Time Warner and AT&T more competitive during a revolutionary transformation that is occurring in the video programming marketplace." They continued to argue that the DOJ's suit was a case of "selective enforcement"- where by the government is essentially blocking the deal between the two companies due to President Donald Trump's hostility towards Time Warner, CNN's parent company. The trial between the DOJ and AT&T will take place on March 19, and is expected to last about three weeks.
Analysis: There's no doubt that this merger will somewhat increase consumer prices. However, President Trump's affiliations with CNN has raised some interest regarding this particular issue. Trump has engaged in a highly publicized battle with CNN for quite some time, often dismissing the network as "fake news" and criticizing its coverage. This may raise concerns in the judge's mind because of Trump's battle with CNN may undercut the seriousness of the case. It could color it with politics rather than applying the law.
Questions:
Do you think this merger will lead to increase consumer prices?
Do you think the government singled out the company's deal due to presidential interference?
What's your opinion about this case?
2 comments:
I think that this merger may lead to an increase in prices because AT&T would certainly have the ability and reasonability to do so. Considering AT&T's position as one of the leading cellular device companies and a competitor in the broadcasting market, I think this merger would give them a lot of advantages in the latter market and a lot more power overall. Given that the television market is becoming less popular with the rise of streaming networks like Netflix, Amazon and Hulu, the contribution of Time Warner to AT&T is less than it would have been ten years ago, but it is still a major gain nonetheless. I think that because the market for television service providers is oligopolistic, AT&T could act as a monopolist, rising the prices for premium channels like HBO and Cinemax. I think that it is reasonable to assume that the gov't acted on the president's bias, but it might not be a strong case against the DOJ.
I'm not concerned about any media companies merging. Even though big corporations can sound scary, at the end of the day they just sell products (oversimplified, but holds true especially for entertainment). The reason why we see these 'old' media companies being consolidated is because they are trying to compete with new media: Netflix, YouTube, Amazon, etc. There isn't a lack of competition in this industry.
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