Fair Play: Be Nice or Get Out of My Courtroom


FAIR PLAY

Antitrust deciphered.

ATT Blog 2

The judge overseeing the government’s lawsuit to stop AT&T Inc. from buying Time Warner Inc. already is warning the parties to keep their cool in the high-stakes antitrust fight, guarding against the real possibility that things could get ugly.

U.S. District Judge for the District of Columbia Richard Leon has ordered the parties will meet every two weeks until the March trial date because “this is that important a matter.” His tight grip on the case signals he doesn’t want the companies or government to play behind-the-scenes games like cluttering the docket or other delay tactics.

This is the most high-profile antitrust case since the government’s suit against Microsoft in the 1990s. It’s in the judge’s interest to keep the parties focused on the legal questions.

“I want to encourage you all to work well together,” Leon last week told opposing lawyers in front of a packed Washington courtroom at the first face-to-face meeting when he set the trial date for March 19.

Daniel Petrocelli, the top lawyer for AT&T, promised Leon that “we will do everything in our power to avoid needless friction.”

We’ll see how long that lasts.

For weeks, AT&T has publicly poked the Justice Department over a range of grievances, like approving similar mergers but blocking this one or potentially carrying out the wishes of President Donald Trump. The DOJ is at a disadvantage in the media swirl because of government confidentiality requirements about investigations.

AT&T CEO Randall Stephenson has gone after the antitrust division’s ability to maintain independence from the White House, suggesting the lawsuit is a political favor to President Donald Trump who has long been outspoken against the deal, and CNN, on the campaign trail and in office.

“There’s been a lot of reporting and speculation whether this is all about CNN,” Stephenson said after the lawsuit was filed. “Frankly, I don’t know. But nobody should be surprised the question keeps coming up, because we’ve witnessed such an abrupt change in the application of antitrust law.”

Justice Department officials have shrugged off conspiracy theories that Trump or other White House staff have meddled in the investigation. AT&T counters that the discovery phase of the litigation will uncover any inappropriate contact about the deal.

So far, no evidence has come forward to indicate the DOJ’s investigation has been anything other than what it’s supposed to be – a close look at the market power of the merged entities. Makan Delrahim, head of the antitrust division, told lawmakers at his Senate confirmation hearing earlier this year that politics will play no role in merger reviews. The DOJ’s ethics office cleared him of any conflicts of interest in reviewing the deal shortly after he was confirmed in September.

Still, DOJ lawyers will have to provide a solid and convincing explanation when Trump’s disparaging CNN comments inevitably come up in court.

As the case progresses and lawyers face a fast-tracked timeline, it’s not hard to imagine their relationship deteriorating. A lot is on the line for both parties. The Justice Department needs to protect its reputation as an independent enforcement arm and its commitment to bringing strong cases supported by an impartial review of the facts and law.

On the other side, the companies want to finalize this $85.4 billion deal they say will enable them to take on content powerhouses Amazon Inc. and Netflix Inc.

Judge Leon has made clear he has little patience for squabbling. “If we’re going to have constant fights, that’s going to be tough,” he warned. “I’m putting the onus on you all.”

What’s Happening

The Senate Judiciary Committee’s antitrust panel will hold its first hearing of the year on Wednesday to discuss the relevance consumer welfare standard.

Quote of the Week

“If we’re going to begin a new era of antitrust enforcement, we need to demand a new breed of antitrust enforcers. We need enforcers with steel spines who will stand up to companies with the best-dressed lobbyists, the craftiest lawyers, and the highest-paid economists. Enforcers who will turn down papier-mache settlement agreements and actually take cases to court,” said Sen. Elizabeth Warren (D-Mass.) at an event sponsored by the Open Markets Institute in Washington.

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