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US media merger criticized

October 24, 2016

The proposed merger, celebrated by the two companies' bosses as a "perfect match," will likely face regulatory hurdles and political opposition no matter who wins the US presidential election.

USA | Time Warner Center
Image: picture-alliance/dpa/J. Szenes

The $85-billion (78-billion euro) purchase of Time Warner by US telecoms giant AT&T drew skepticism from Donald Trump, Hillary Clinton and others immediately after it had been announced on Sunday.

During a speech on Saturday, Republican candidate Donald Trump reacted to speculation about the merger, saying he would block the takeover because it meant "too much concentration of power in the hands of the too powerful and few."

A statement released by his campaign on Sunday was even terser in its language, saying: "Donald Trump will break up the new media conglomerate oligopolies that have gained enormous control over our information."

The billionaire businessman has repeatedly railed against the media's role in what he has described as a "rigged" election. His economic advisor Peter Navarro said that Trump would never approve a deal that would allow "the original and abusive telephone monopoly to buy Time Warner and thus the wildly anti-Trump CNN."

Rare case of unity

Trump's Democratic rival Hilary Clinton, has not yet commented on the takeover, but her campaign spokesman Brian Fallon said the merger raised "a number of questions and concerns."

Earlier this month, Clinton vowed to strengthen anti-trust enforcement and scrutinize mergers and acquisitions "so the big don't keep getting bigger and bigger."

Tim Kaine, Clinton's running mate, was also wary. "Less concentration, I think, is generally helpful, especially in the media," Kaine said on NBC's "Meet the Press" on Sunday.

Onetime Democratic presidential hopeful Sen. Bernie Sanders, who is now backing Clinton, also released a statement Sunday, saying the feds "should kill" the deal, which "would mean higher prices and fewer choices for the American people." Sanders' comments carry weight because Clinton needs Sanders' coalition of young and left-leaning voters to propel her to the presidency.

The Senate subcommittee on antitrust will hold a hearing on the acquisition sometime in November, members of the panel said. The US Department of Justice and the Federal Communications Commission are also likely to review the deal.

Close scrutiny

The merger between AT&T and Time Warner was unanimously approved by the two companies and would create a media behemoth worth more than $310 billion.

If the deal goes through and the companies aren't forced to sell assets, it would combined the phone company's 130 million customers and 25 million pay-TV subscribers with Time Warner extensive collection of Hollywood movies, TV channels and productions, including HBO, CNN and DC Comics.

David MCAtee, AT&T senior executive vice president and general counsel, believes regulators will approve the merger. "In the modern history of the media and the Internet, the US government has always approved vertical mergers like ours, because they benefit consumers, strengthen competition, and, in our case, encourage innovation and investment."

However, competitors such as NBCUniversal, Twenty-First Century Fox and the Walt Disney could find that their content could be put at a disadvantage, some consumer advocacy groups suggested.

"A transaction of this magnitude obviously warrants very close regulatory scrutiny," said Zenia Mucha, chief communications officer for Disney.

NBC Universal, which is owned by Comcast and Fox, declined to comment on the merger. Netflix Chief Content Officer Ted Sarandos, speaking on Saturday at the Institute on Entertainment Law and Business conference at the University of Southern California, said he expected a close examination of the deal by regulators.

uhe/jd (Reuters, AFP, dpa)

 

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