On Monday, the Department of Justice sued to block AT&T’s acquisition of Time Warner, alleging that the merger would hinder competition in violation of federal antitrust law. The DOJ had reportedly warned AT&T that it would need to sell either Turner Broadcasting—CNN’s parent company—or DirecTV to receive approval for the merger. President Donald Trump has, of course, expressed profound ire toward CNN for years. His well-documented animosity, combined with the administration’s unexpected and inconsistent approach to the merger, presents a thorny First Amendment question: Could the government be using antitrust as a pretext to retaliate against a news outlet it dislikes?
Absolutely. The Trump administration’s sudden and selective antitrust enforcement may very well be a front for an unconstitutional effort to punish expression it opposes. AT&T will have ample opportunity to make this objection in court. And if it argues this position persuasively, it may obtain access to government records to prove that Trump’s bias against CNN illegally influenced the DOJ’s antitrust crackdown. Once again, Trump’s own words may wind up undermining his administration’s legal position in court.
The DOJ’s decision to file suit against AT&T and Time Warner raises a few red flags, even for consumer advocates who instinctively welcome the revival of robust antitrust policies. First, it is not a horizontal merger—the combination of two competitors in the same industry—a move that often has negative implications for consumers and is therefore carefully policed by regulators. Instead, the merger is a vertical one between two companies in the same industry that do not compete against each other. Vertical mergers don’t pose the same obvious threat to competition that horizontal mergers do, which is one reason why the courts have not blocked one for more than four decades.
Why, then, has the DOJ decided to draw the line here? It’s an especially pertinent question just three months after the government quickly approved Amazon’s purchase of Whole Foods, a troubling horizontal merger. Indeed, the Trump administration showed little interest in antitrust until the DOJ abruptly informed AT&T in November that, in order to merge with Time Warner, it had to sell Turner Broadcasting (and thus CNN) or DirecTV. As the New York Times’ Jim Rutenberg has noted, DirecTV has become an essential satellite content distributor for AT&T, making its sale “a non-starter”—as the DOJ was well-aware. In reality, then, the government gave AT&T one option: Sell Turner Broadcasting or risk your merger. And when AT&T refused to play ball, the company got slapped with an antitrust suit.
To be sure, there are plausible reasons to oppose the AT&T–Time Warner merger and to focus on the role that Turner Broadcasting could play in stifling competition. For instance, the DOJ surmises that AT&T could jack up the price that its competitors must pay for Turner Broadcasting networks. The DOJ also argues that AT&T could withhold Time Warner content from competitors, forcing those competing firms to black out popular channels and compelling consumers to switch providers.
While that is all true enough, these are simply not credible concerns from the Trump administration. As Michael Dorf has pointed out, Trump’s Federal Communications Commission has taken a position on vertical integration that directly contradicts the DOJ’s. Under Trump-appointed chairman Ajit Pai, the FCC plans to repeal net neutrality, allowing internet service providers to favor their own content and block or throttle access to their competitors’ material. In other words, the FCC wants to permit what the DOJ purportedly wants to prohibit. Even more glaringly, Trump’s FCC just eliminated regulations that might have blocked Sinclair Broadcast Group’s proposed merger with Tribune Media. Thanks to the FCC, Sinclair, a vigorously pro-Trump company, will now be able to buy 42 new TV stations, allowing the firm to dominate local media markets in many regions.
That leads us to the second red flag in this case: The Trump administration seems to endorse mergers that expand the reach of pro-Trump media and to oppose mergers that benefit independent media outlets. At the same time, Trump has repeatedly announced his abhorrence of CNN, repeatedly tweeting that it is a purveyor of “fake news,” and even sharing a tweet of him punching the network’s logo. Trump’s animus has spurred speculation that it was presidential prejudice against the network, and not a newfound passion for antitrust, that led the administration to demand that AT&T offload CNN, and then to block its merger when it declined.
In a typical administration, the president would never inject his political preferences into the Justice Department’s antitrust enforcement, from which the White House maintains a respectful distance. But under Trump, there are already indications of executive meddling. Makan Delrahim, the DOJ’s chief antitrust enforcer, publicly stated in 2016 that an AT&T–Time Warner merger would pose no serious legal problems, declaring: “I don’t see this as a major antitrust problem.” Now he has completely reversed his position. Why the change of heart? Did Delrahim engage in a sincere re-evaluation of the data and doctrines? Or was he acting on pressure from the White House?
AT&T may soon find out. Bloomberg reports that the company will request access to communications between the White House and the Justice Department regarding the merger, apparently to determine whether Trump exerted improper influence. If the president did use antitrust as a pretense for penalizing CNN, he likely ran afoul of the First Amendment’s protection against government retaliation for protected expression. Trump’s use of antitrust enforcement to punish political speech would doom the DOJ’s attempt to block the merger.
Even if AT&T could not find direct evidence of retaliation, any documentation of political motive would fatally undermine the DOJ’s antitrust arguments. Trump’s own comments about Muslims persuaded courts to block his first and second travel bans, holding that his words undermined the legal justifications for both executive orders. And on Thursday, an appeals court ordered the administration to turn over documents pertaining to the repeal of the Deferred Action for Childhood Arrivals program after civil rights groups sued, accusing the government of giving dishonest reasons for ending the program. The federal judiciary does not take well to mendacious government attorneys.
There is a progressive case to be made against the AT&T–Time Warner merger. The concentration of corporate power poses a genuine threat to consumers and, as the Sinclair deal illustrates, independent media. That’s why the Writers Guild of America—which rarely agrees with Trump—backed the DOJ’s lawsuit on Monday.
But even if the Trump administration is doing the right thing, it appears to be doing so for dangerously wrong reasons. At a minimum, the courts should permit AT&T to scrutinize communications that led the government to meddle with the merger. AT&T’s corporate concentration may be disquieting, but an oblique assault on the First Amendment is far worse.