One of the leading telecom industries in the country, AT&T had recently announced their plans to acquire Time Warner Inc. for an estimated $85.4 billion deal. This proposed merger was frostily greeted by the lawmakers, but reports indicate that they have changed their opinion on the merger.
A recent hearing held at the Capitol Hill discussed how mega mergers like this will be reviewed under the Trump Administration. The members of a Senate Judiciary subcommittee, which oversees regulatory agencies that decide on mergers, stated that the deal between AT&T and Time Warner merited tough scrutiny. The chief executives of both Time Warner and AT&T were questioned about a number of issues related to this proposed merger.
The lawmakers also enquired that whether the traditional way of evaluating or analyzing the mergers has become outdated or not as major companies such as Google and Facebook have become huge media platforms, which threaten the television industry. Reports say that the tone of the lawmakers was a lot more cautions than the one they used after the announcement of this deal.
The head of the full judiciary committee, Senator Charles E. Grassley, Republican of Iowa, said, “We want to ensure that competition thrives in this critical market and we don’t stifle innovation or deter the emergence of cutting-edge technologies that customers demand.” He also added that the video landscape has been transformed by Netflix, Amazon, Facebook, and Google.
Senator David Perdue, Republican of Georgia stated that this proposed merger would combine companies, which do not participate against each other. He said, “The consumer is benefited from the aggregation. That is called capitalism.”
A professor at Georgetown’s McDonough School of Business, Larry Downes, said that the senators were asking “hard questions.” However, he added, “they seem to be open-minded about the changing nature of competition in the information sector.”
AT&T and Time Warner had earlier stated that the telecom company would buy Time Warner in order to produce a mobile video powerhouse. At present, the mergers are not reviewed by the Members of Congress, but the hearings will provide guidance for the Federal Communications Commission and for the antitrust regulators at the Justice Department.
An analyst at Cowen and Company, Paul Gallant said, “The D.O.J. pays particularly close attention to Senate and House antitrust subcommittees because they oversee the D.O.J.” He also added that the committee’s commentary “bears watching for its potential effect on the D.O.J.”