Antitrust Trial: DOJ Says AT&T Will Use Time Warner as a ‘Weapon’ to Harm Rivals
WASHINGTON — The lead attorney for the Justice Department said that AT&T would use Time Warner content as a “weapon” to harm rivals as the antitrust trial entered its third day on Thursday with opening arguments.
Craig Conrath, a veteran in the Antitrust Division, also said that they would present an array of evidence showing that AT&T would have the “ability and incentive” to engage in anticompetitive conduct, as the bulked-up company would have increased leverage to charge more for Time Warner content.
He added that AT&T could curb the growth of emerging “virtual” multichannel providers that enable consumers to cut the cord of their traditional video providers. Executives from Dish are expected to testify for the government about their Sling service.
He indicated that during the trial, expected to last six to eight weeks, they would present not only witnesses but some of the documents and emails of AT&T and Time Warner executives.
Meanwhile, AT&T-Time Warner’s lead attorney, Daniel Petrocelli, said that the government was “fundamentally stuck in the past” in assessing the competitive landscape, and has failed to take into account the threat that Google and Facebook pose to traditional media advertising models.
He spent much of his opening arguments trying to puncture holes in the government’s contention that the merger would lead to a price increase on the order of $400 million or more per year. He indicated that they would challenge some of the economic projections being offered by one of the government’s witnesses, Carl Shapiro of University of California at Berkeley.
He also said that the government would fall short of meeting its burden of showing that it was “more probable than not” that the merger would “substantially lessen competition.”
He noted that the government “cannot prove that the merger is likely to lessen competition, much less to lessen it substantially,” he said.
Among those attending the oral arguments were AT&T CEO Randall Stephenson and Time Warner CEO Jeff Bewkes. Both are expected to testify later in the trial.
(Pictured: Randall Stephenson and Jeff Bewkes.)
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