On Monday, November 20, the Department of Justice filed suit in the U.S. District Court to block the proposed merger of AT&T and Time Warner. Just three days earlier I, along with my Free State Foundation colleague Theodore Bolema, published an op-ed in The Hill explaining why the Justice Department, if it attempted to block the merger in court, would have a tough time prevailing. Here’s the beginning of the op-ed:

"Based on recent press reports, the Department of Justice may be preparing to challenge the proposed merger of AT&T and Time Warner by seeking to force the merging companies to sell off some or all of the Time Warner video channels as a condition of approval. Put simply, for a vertical merger, this would be unprecedented relief in the modern antitrust era.

Time Warner is a programming content provider, through its CNN, HBO, and Turner channels and its Warner studios. AT&T provides distribution “pipes” for delivery of video content through its DirecTV satellite service as well as its broadband and mobile services. So the proposed combination is a “vertical” merger with no meaningful “horizontal” overlap in lines of business between the companies. Vertical mergers – as opposed to horizontal ones – are rarely challenged under the antitrust laws, but the prominence of these companies is attracting more public scrutiny than has been the case with other vertical mergers.

Importantly, the merger includes no transfer of broadcast licenses, so it is not being reviewed by the Federal Communications Commissions under its vague “public interest” standard requiring affirmative approval from the agency. Instead, the review is being conducted by the Justice Department under Clayton Act standards which focus on the economic impact of the merger. The government can only block the merger by proving its case in court."

To read the op-ed in its entirety in order to appreciate the challenge confronting the Justice Department, please click here.