The government’s bid to halt the merger between AT&T and Time Warner is set to start Thursday morning in Washington, D.C. The Department of Justice claims the $85 billion deal will hurt competition and consumers, but the companies say the government misstates who the actual competition is.
In pre-trial documents, the Justice Department says consumers would end up paying $436 million more a year to watch TV. AT&T refutes this. Plus, it says, even if true, it only amounts to 45 cents per customer per month.
Steven Salop, a Georgetown Law professor who studies anti-trust issues, says actually the government underestimates the increased cost to consumers when you include services like Netflix or PlayStation Vue. “Nor does it include any possible higher costs in wireless. AT&T would also have an incentive to raise the price of Turner content to its wireless competitors, Sprint, Verizon, and T-Mobile.”
AT&T and Time Warner say the deal is necessary to battle the likes of Google, Facebook, and Amazon.
The trial is expected to last six to eight weeks.
