After a year-and-a-half of bickering over the proposed Time Warner merger, AT&T and the government will finally have their day in court this week.
It’s a landmark case that has captured the attentions of both investors and legal scholars. AT&T insists the two companies don’t compete directly, which should exempt them from antitrust claims. The Justice Department says the combination of the phone giant and the entertainment conglomerate would create a company so large it could hurt its competition.
It’s a multi-layered case, but there are a few pressing questions which people are most eager to hear answers to.
Will you pay more—or less—to watch Game of Thrones?
The government insists the combined company could insist that cable providers pay more for its networks—a particularly worrisome charge when you consider AT&T already owns DirecTV. The Justice Department says the merger could lead to $463 million in extra fees being passed along to cable subscribers each year.
AT&T rejects that math, saying it expects costs to go down, though it points out that even if the Justice Department is right, that works out to just 45 cents per month per user.
How will AT&T use viewer usage data?
AT&T already has access to a lot of user data. It oversees nearly 16 million Internet connections and has over 156 million wireless subscribers. But adding the vast media holdings of Time Warner (which include HBO, CNN, TNT, TBS, DC Comics, New Line Cinema, and Warner Bros. Interactive, a leading video game studio) will give it access to a lot more.
AT&T wants to use that data to build a digital advertising system that can rival those of Google and Facebook, but what protections will be in place for user privacy? And will there be a way to opt out of tracking across all of AT&T’s holdings?
What is Trump’s involvement?
Donald Trump is no fan of CNN. He regularly reminds people of that via Twitter. And he has previously said his administration will not approve the deal, leading some people to question if he has taken a direct role in the review of the deal. Makan Delrahim, the assistant attorney general who oversees the antitrust division, has sworn under oath the White House has not been given him instructions in the deal. An AT&T request to see communications logs was denied by a judge.
What could this mean for 2018’s merger mania?
According to the Washington Post, this year has already seen $409 billion worth of deals announced—the fastest start ever for mergers and acquisitions in a single year. But should the Justice Department prevail in this case, it could throw a cold blanket on that enthusiasm.
At issue are “vertical” mergers, where a company acquires a supplier. It’s a way many legacy companies are attempting to compete against giant tech companies—and in many cases protect their industry.
When should we expect a verdict?
With a case this big, expect several weeks of arguments and testimony. Experts, though, say we should hear a ruling some time in April.