The deal, announced just two weeks before the U.S. election, may be the strongest sign yet that corporate America expects Democrat Hillary Clinton to be the next president and maintain the same tenor as President Barack Obama on anti-trust and regulatory enforcement, which is seen as already tough.
Clinton spokesman Brian Fallon told reporters on Sunday there were "a number of questions and concerns" about the deal "but there's still a lot of information that needs to come out before any conclusions should be reached."
Democratic vice presidential candidate Tim Kaine and several U.S. lawmakers said on Sunday that the deal may raise antitrust issues, one day after Republican presidential candidate Donald Trump also criticized the deal.
The Senate subcommittee on antitrust will hold a hearing on the acquisition before the end of the year, a spokesman for the subcommittee's chair, Sen. Mike Lee of Utah, said.
Kaine, Clinton's running mate and a senator from Virginia, said lawmakers and regulators would have to review the deal and "get to the bottom" of questions over whether the merger would decrease competition.
"I'm pro-competition," Kaine said on NBC's "Meet the Press." "Less concentration, I think, is generally helpful especially in the media."
Kaine said he had not had a chance to review the details of the deal.
Trump said at a rally on Saturday that he would block it if he wins the Nov. 8 election against Democrat Hillary Clinton.
"It's too much concentration of power in the hands of too few," said Trump, who has accused the media of being biased against him and his campaign.
The U.S. Justice Department, not the president, has the power to reject such a deal if it violates antitrust laws. AT&T said it is unclear if the Federal Communications Commission will also have jurisdiction to review the deal.
A spokesman for the Justice Department declined to comment on the deal on Sunday and an AT&T spokesman also declined to comment on lawmaker criticism.
The biggest deal in the world this year will, if approved by regulators, give AT&T control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets. It raises concerns that AT&T might try to limit distribution of Time Warner material.
AT&T CEO Randall Stephenson told reporters on Saturday night he believes regulators will approve the deal. The government typically in a vertical merger deals with concerns "by remedies, concessions if you will, and conditions imposed on a combination."
Stephenson said there is "no competitive harm that is being rendered by putting these two companies together, so any concerns by the regulators, we believe, will be adequately addressed by conditions."
Competitors to AT&T and Time Warner such as NBCUniversal, Twenty-First Century Fox Inc (FOXA.O) and the Walt Disney Co. (DIS.N) could find that their content could be put at a disadvantage, some consumer advocacy groups suggested. NBC Universal, which is owned by Comcast Corp (CMCSA.O), and Fox declined to comment on the merger. Disney did not respond to a request for comment.
CONGRESSIONAL SCRUTINY
Senators Lee and Amy Klobuchar, the antitrust subcommittee's ranking Democrat, said on Sunday the committee would "carefully examine" the merger.
Lawmakers may pursue inquiries into the merger and build support for or against it, but it is ultimately up to the Justice Department to approve, block or place conditions on the deal.
AT&T will pay $107.50 per Time Warner share - half in cash and half in stock - worth $85.4 billion overall, according to a company statement. AT&T said it expected to close the deal by the end of 2017.
Two of the biggest congressional critics of the mega-mergers among media companies and elsewhere in the U.S. economy said late on Saturday that they would take a hard look at this deal. Senator Richard Blumenthal, who is on the Senate Judiciary Committee, noted the proposed acquisition would combine a wireless company, a pay-TV provider and a studio. "I will be looking closely at what this merger means for consumers and their pocketbooks and whether it stands up to the rigorous review standards set by the Department of Justice's antitrust division in the last few years," he said. Senator Al Franken, who is also on the Judiciary Committee, said that the deal raised "immediate flags." "I'm skeptical of huge media mergers because they can lead to higher costs, fewer choices, and even worse service for consumers," he said. "And regulators often agree, like when Comcast unsuccessfully tried to buy Time Warner Cable, a deal that I fiercely opposed."
Despite their concern, a handful of antitrust experts said AT&T's bid for Time Warner would likely win U.S. antitrust approval, and two thought there may not even be conditions put on it.
"(The Justice Department) will look at it but they won't stop it," said Darren Bush, who teaches antitrust at the University of Houston's law school.
Andre Barlow, an antitrust expert with the law firm Doyle, Barlow and Mazard PLLC, noted that the government may worry about whether other cable and internet companies would continue to have access to Time Warner content like HBO and CNN.
"It's a smaller version of the Comcast/NBCU deal but it raises the same types of concerns," he said.
Reuters
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