Categories LATEST, Technology

AT&T – Time Warner deal can increase TV bills $436 million a year

It’s been almost a year since then-presidential candidate Donald Trump voiced his opinion on blocking the AT&T (T) – Time Warner (TWX) deal. Despite not having much intrusion from the President’s part, the deal is still yet to take off.  The deal that was initially expected to get cleared by the end of 2017, has now hit a fresh snag. The US Department of Justice (DOJ) argues that the proposed merger would drastically increase the total amount Americans would have to pay for TV services by a whopping $436 million.

Courtesy – Flickr

In the trial brief filed last week, the DOJ sued satellite TV titan AT&T, which owns DirecTV, to block its purchase of Time Warner. The lawsuit claims that the proposed merger would violate Section 7 of the Clayton Act, as it is a threat to competition. The act was passed in 1914 and bans business practices that tend to form monopolies.

Meanwhile, AT&T has opposed a set of estimations proposed by an economics professor Carl Shapiro from the University of California in Berkeley. In the antitrust trial that is expected to begin on March 19, Shapiro is said to be one of the government’s expert witnesses. According to AT&T, even if there is a price hike post-merger, customers would pay not more than 45 cents, indicating the deal would cause minimal consumer harm. AT&T sees this merger as an effective strategy to battle rivals like Comcast (CMCSA) and Netflix (NFLX) and increase the consumer base.

This mega-deal is what is known as a vertical merger as it involves two companies that are not direct competitors. Vertical mergers have never been blocked in the last 40 years.

Though there is a lot of uncertainty surrounding the deal, it is not sure whether this deal can survive the regulatory challenge.  Even without Time Warner, AT&T will continue to be an attractive investment.

Most Popular

MU Earnings Preview: Strong Q2 results in cards amid growing AI demand

Micron Technology, Inc. (NASDAQ: MU) is uniquely positioned to capitalize on the AI wave sweeping the tech industry, leveraging its high-bandwidth-memory products designed for massive data processing tasks. The company

What to look for when FedEx (FDX) reports Q3 2025 earnings results

Shares of FedEx Corp. (NYSE: FDX) stayed green on Friday. The stock has dropped 14% over the past three months. The package delivery company is scheduled to report its third

Docusign (DOCU) Earnings: 4Q25 Key Numbers

Docusign, Inc. (NASDAQ: DOCU) reported total revenue of $776.3 million for the fourth quarter of 2025, up 9% year-over-year. Net income was $83.5 million, or $0.39 per share, compared to

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close