Delrahim to Hill: We Were Forced to Sue to Block AT&T-Time Warner - Multichannel

Delrahim to Hill: We Were Forced to Sue to Block AT&T-Time Warner

Tells Hill companies' refusal of multiple settlement offers was to blame
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Makan Delrahim

Makan Delrahim

Makan Delrahim, who heads up the Department of Justice's antitrust division, told a Senate panel Wednesday (Oct. 3) that Justice had been forced to sue to block AT&T-Time Warner, the first such suit against a vertical merger in 40 years, after "multiple efforts to settle."

That came in a Senate Antitrust Subcommittee hearing Wednesday on antitrust enforcement with Delrahim and Federal Trade Commission Chairman Joe Simons.

Delrahim was outlining his department's antitrust efforts, including "confronting multibillion dollar mergers involving important industries."

Related: Attorneys General Back AT&T in Time Warner Merger Suit

Waxing sarcastic about the criticisms about the AT&T/Time Warner deal being the first vertical merger challenged in 40 or 50 years, he took aim at TV pundits: "During the trial and leading up to it, there was a perception created by maybe hundreds of new vertical merger experts on television that all of a sudden they were saying we had never challenged a transaction in 40, 50 years. That's just not true. There have been multiple challenges where parties have sought divestitures or consent decrees."

Delrahim's point was that other parties had agreed to divestitures, while AT&T and Time Warner would not—DOJ had sought the divestiture of Turner programming, arguing the combined company could limit its access to third parties, particularly over-the-top competitors.

Delrahim cited the Bayer-Monsanto merger, where it secured a key divestiture. He praised the parties for "working with us."

He said there was agreement that vertical mergers generally don't have the same issues as horizontal, but that didn't mean they were per se legal. 

Delrahim was also asked about what DOJ thought about most favored nation clauses (MFNs) in TV content distribution agreements. He said MFNs can be either competitive or anticompetitive, in the latter case raising barriers to entry. He pointed out DOJ had imposed MFN-related conditions in the Charter/Time Warner Cable merger. He said DOJ would continue to examine the issue.

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