A federal judge’s decision to approve the $85 billion merger between AT&T and Time Warner is the latest example of the nation’s judicial system boxing in President Donald Trump’s agenda.
Trump, a harsh critic of Time Warner-owned CNN, took aim at the deal when it was announced in the weeks before his election, vowing to nix it for concentrating too much power in the hands of too few. Just over a year later, the Justice Department sued to block the merger.
Ultimately, U.S. District Judge Richard Leon, a nominee of President George W. Bush, found the law was not on the Trump administration’s side. In court on Tuesday, he admonished the DOJ for failing to provide sufficient evidence to bolster any of the reasons it provided for bringing the case, namely that the merger would stifle competition and raise prices for consumers.
It’s one of a growing number of presidential priorities that have become entangled and slowed in court, from the ban on travelers from some Muslim countries to the elimination of the Deferred Action for Childhood Arrivals program and the decision-via-Twitter to ban transgender troops.
“Trump’s meddling in law enforcement actions, his attacks upon particular companies, and his utter unpredictability have created the kind of legal uncertainty common in ‘banana republics,'” said Berin Szóka, president the libertarian group TechFreedom. “At least in antitrust law, the courts, not Trump officials, will have the final say on what the law really is.”
Leon went so far Tuesday as to discourage government attorneys from seeking to delay his decision pending an appeal, adding that their prospects for winning in a higher court were bleak and that the companies and their investors would be harmed in the process.
“I hope and trust that the government will have the good judgment, wisdom, and courage to avoid such a manifest injustice,” the judge wrote in his opinion. “To do otherwise, I fear, would undermine the faith in our system of justice of not only the defendants, but their millions of shareholders and the business community at large.”
Some congressional Democrats and consumer advocates criticized the judge’s decision. They have found common cause with the Justice Department in warning about the combined market power of AT&T-Time Warner, putting them in rare and awkward alignment with Trump.
“AT&T will now be able to leverage its control over content — from ‘Game of Thrones’ to March Madness — to extort higher fees from its competitors, which will almost certainly be passed on to consumers in the form of higher cable prices,” said Sen. Richard Blumenthal (D-Conn.).
“Certainly courts will be essential to reining in Trump. But in this case, broken clocks and all, the Trump DOJ was on the side of the public interest,” said Craig Aaron, president and CEO of liberal advocacy group Free Press. “I’m all for courts stopping Trump, but I’d like to see them put the brakes on supersizing AT&T, too.”
With the judge’s approval, AT&T is poised to take ownership of Time Warner’s broad spectrum of popular television and film holdings, including HBO, Warner Bros., CNN and TBS. AT&T already distributes pay TV through DirecTV, which it bought in 2015.
Tuesday’s ruling could also open the floodgates to a wave of other mega-deals. Reports indicate Comcast may make a formal bid to buy the assets of 21st Century Fox, potentially upending the $52.4 billion stock offer that Disney made for the media company in December.
In the wireless space, T-Mobile and Sprint — the third- and fourth-largest wireless carriers, respectively — are moving forward with their own $26 billion merger bid.
The Justice Department has said repeatedly that the White House did not interfere in its review of the merger or its decision to bring the lawsuit, though that explanation took some hits when Rudy Giuliani, now part of Trump’s legal team, declared last month that the president “denied” the merger — a comment he later walked back.
DOJ antitrust chief Makan Delrahim told reporters upon leaving the courthouse Tuesday that the ruling “does not change our view that structural remedies are the best way to protect the American consumer.”
“I’ve taken an oath to uphold competition,” he said.
Delrahim said government lawyers would review the judge’s full opinion before deciding on whether to seek an appeal. The companies want to close their deal by June 21 — or else AT&T will owe Time Warner a $500 million breakup fee.
Though Judge Leon attempted to silence the political noise surrounding the trial — effectively preventing it from becoming a part of the courtroom proceedings — it’s not clear if Trump’s feelings toward certain companies will become a factor in future antitrust reviews. Already the president has weighed in on the 21st Century Fox deal-making and tweeted favorably about Sinclair Broadcast Group, which is seeking to acquire Tribune Media.
“When political leaders vocally stake out a position and you take action that in some sense is consistent with their preference, the cloud of potential political influence hangs over your decision forever,” said William Kovacic, a former Republican chairman of the Federal Trade Commission. “There’s no way to get rid of it.”