AT&T Dealt Setback in Probing Trump's Influence on DOJ Merger Review

A judge says the Justice Department's attempt to block this vertical merger "may, indeed, be a rare breed of horse, [but] it is not exactly a unicorn!"
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President Donald Trump

A month before the beginning of a trial that will decide the fate of AT&T's proposed $85 billion deal to acquire Time Warner, a federal judge has refused AT&T's bid to compel communications between Donald Trump's White House and the Department of Justice. In doing so, the judge perhaps suggests that a defense premised on White House interference may fall short.

The DOJ is contesting the merger as a harm on competition.

In response to the lawsuit, AT&T's attorneys have been probing Trump's influence on the DOJ given the president's noted distaste of CNN, a Time Warner unit.

Technically, the defense that AT&T has been attempting to bolster is known as "selective enforcement," meaning that the Justice Department has insincere motives and is only pursuing a block on this merger with discriminatory effect and intent.

U.S. District Court Judge Richard Leon writes in an opinion, "Defendants have fallen far short of establishing that this enforcement action was selective — that is, that there exist persons similarly situated who have not been prosecuted."

AT&T's attorney spoke of Comcast's 2011 acquisition of NBCUniversal, but the government pointed out that before settling with Comcast, the Justice Department did indeed file an enforcement action to enjoin that transaction.

"Defendants' attempt to use the Comcast-NBCU transaction as the basis for their selective enforcement claim is therefore unavailing," writes the judge. "The same goes for defendants' efforts to distinguish this enforcement action from the Government's treatment of vertical mergers generally. As counsel for the Government explained at length during the hearing, history belies the notion that this action is the first and only time that the Government has found an antitrust problem with a proposed vertical merger or insisted on a structural remedy as a condition to settlement. So while it may, indeed, be a rare breed of horse, it is not exactly a unicorn!"

In discovery in this case, AT&T and Time Warner asked the government to produce documents related to their "selective enforcement" defense including communications regarding the White House's views of the proposed merger.

The government then produced a log of communications, but held back the communications themselves.

According to the judge, there's nothing in the log that indicates "untoward" communications, and with a fast-approaching trial and insufficient demonstration thus far of "selective enforcement," the judge refuses to compel discovery and interrogatory requests related to communications between the White House and the Attorney General. 

AT&T could still move forward with arguments of selective enforcement. The company has signaled it wishes to call DOJ antitrust chief Makan Delrahim to the witness stand during the trial.

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