How the DOJ’s Face-Off With AT&T Could Alter American Business

The face-off, between the Justice Department and AT&T over the company’s $85 billion agreement to buy media giant Time Warner, has broad ramifications for media, technology and other industries as well as for the government’s powers to deter large-scale corporate consolidation.

It could determine whether antitrust enforcers will have real practical authority to challenge so-called vertical mergers involving two complementary companies that operate at different levels of the same industry. Typically, the government challenges unions of direct competitors that sell similar products and services, or horizontal mergers. The ruling could affect major pending health-care mergers and may have ramifications for the tech economy. If the deal is allowed, AT&T argues, it could act as a bulwark against the power of digital media giants such as Google and Facebook. Or it could create an entertainment behemoth that holds consumers hostage, as the government insists. The outcome could also affect how strongly the Trump administration, with its rival populist and pro-business factions, pursues the kind of vigorous antitrust enforcement that was a hallmark of the Obama administration.

The case is a pivotal moment in a recurring clash between merger mania and government enforcement, and the drama has produced two lead actors: AT&T boss Randall Stephenson and US antitrust chief Makan Delrahim.