AT&T's Time Warner Bid Faces Long, Costly Antitrust Review

AT&TAT&T Inc.'s $85.4 billion deal to purchase Time Warner Inc. faces antitrust hurdles despite being a vertical arrangement due to both its massive size and rapid changes in the media industry.

It could also take over a year for regulators to consider the deal, and the companies could spend millions of dollars seeking approval in the face of widespread skepticism about the benefits of the merger.

AT&T's purchase of Time Warner is a vertical merger—a tie up between two companies that don't compete directly with each other, but instead are involved in different stages of an industry's supply chain.

Antitrust regulators aren't generally concerned with such arrangements. Since 2000, the Justice Department and the Federal Trade Commission have reviewed around 20 vertical deals that raised antitrust concerns, according to Jennifer Rie, a senior litigation analyst with Bloomberg Intelligence. Of those, one transaction was abandoned and the rest ended in consent orders. None went to court.

This may be one of the rare vertical deals to get closer scrutiny, however. DOJ, which will likely review the merger, has put restrictions on similar deals over concerns platform companies will favor their content over other sources and wall off important distribution channels for entertainment and news.

Read more about the implications of a DOJ review in this article.