AT&T-Time Warner lawsuit

Trump tweets on CNN could muddy AT&T-Time Warner lawsuit

The president's tweets have come up in the legal arguments of those battling some of his other policies.

By STEVEN OVERLY

The Justice Department's decision to block the AT&T-Time Warner merger sets up another high-profile lawsuit in which President Donald Trump's prolific and opinionated tweets could complicate his administration's agenda.

The DOJ announced Monday that it would seek to derail the $85 billion deal because the combined company could charge competitors hefty fees to distribute Time Warner content, providing an unfair advantage to AT&T-owned DirecTV. But questions about political meddling by the Trump administration have dogged the merger throughout the government's review process — and those concerns could now factor into arguments the companies make in court challenging the rejection of their proposed union.

"Donald Trump's dangerous talk about CNN cast a shadow over their actions," said Craig Aaron, president of advocacy group Free Press, which opposes the merger. While Aaron called AT&T-Time Warner a "huge merger with clear consumer harms," he warned: "If there's any evidence the White House interfered because it dislikes CNN's journalism, that would be a disaster."

The president's tweets have come up in the legal arguments of those battling his other policies, including his administration's restrictions on travelers from Muslim countries, decision to rescind the Deferred Action for Childhood Arrivals program and ban on openly transgender soldiers.

In an ongoing lawsuit over an intelligence dossier about Trump's alleged ties to Russia, a federal judge is weighing whether the president's tweets that the document is "fake" and "discredited" could require the government to reveal more information about how it fact-checked the document, POLITICO recently reported.

That dynamic could play out again if Trump's frequent criticism of CNN raises doubts about the basis for the DOJ's argument, especially in front of a judge who has more lenient antitrust views, said Blair Levin, a fellow at the Brookings Institution and former FCC official.

"If such evidence is discovered, it's going to be very hard for a judge to agree with the government," Levin said. "The question is the motive for bringing this case. What’s interesting about it from my perspective is the weaker the antitrust case, the more it looks to the judge that there was a motive that was different."

Trump was not shy about his opposition to the merger, saying on the campaign trail that it puts “too much concentration of power in the hands of too few.” Since then, his tweets have frequently maligned Time Warner-owned CNN as "fake news" for what he perceives to be unfair news coverage.

A DOJ official, speaking anonymously to discuss the lawsuit, told reporters Monday that CNN ownership was not a factor in the department's thinking and categorically denied that the White House influenced the decision to file suit. That narrative, the official said, was injected by the companies.

"I can understand why merging parties want to throw sand in the eyes of umpires, but we’re law enforcers and we have to go to court and we'll prove our case," the official said.

The department's 23-page complaint only mentions CNN twice and in both instances simply states the news channel is part of Time Warner-owned Turner Broadcasting, which also includes TBS, TNT and other television networks.

The lawsuit instead highlights past statements by AT&T and DirecTV warning about the dangers of marrying content providers and distributors — the same kind of integration at the heart of the AT&T-Time Warner deal. DOJ officials on Monday said that simply attaching conditions to the merger would not address their concerns and that the companies would need to make "structural" changes, such as divestitures.

White House spokeswoman Natalie Strom, when asked about the impact of the president's tweets, referred to past comments the administration has made saying "no White House official was authorized to speak with the Department of Justice on this matter."

Gene Kimmelman, president of Public Knowledge, a progressive digital rights group that opposes the deal, said the merger is "inconsistent with the law and consumer interests" regardless of whether the administration is Republican or Democrat.

"Despite the political swirl, the case will have nothing to do with politics," said Kimmelman, a former chief counsel for the DOJ antitrust division. "It's about whether this particular consolidation is harmful to competition."

But other telecom watchers, including those who believe the merger would create a behemoth with too much power, expect the Trump tweets will still see their day in court.

"I certainly think that AT&T will use Trump's comments to muddy the waters, but an independent judge will decide whether this merger violates the law or not," said Gigi Sohn, a former FCC official and Georgetown Law fellow. "So politics should play no role here."

Rick Manning, president of the conservative group Americans for Limited Government, which opposes the merger, argues that Trump’s remarks are not likely to influence the case. It should be expected that the DOJ would share the president’s interpretation of the law, Manning said, and that to discredit the DOJ for that “is absurd on its face,” he said.

AT&T officials did not disclose their precise legal strategy on a call with reporters Monday, though CEO Randall Stephenson said his company would not entertain any settlement that involves divesting CNN. He said such a request would violate the First Amendment.

"We don’t have to mount a defense to this case," Daniel Petrocelli, an O'Melveny & Myers attorney who represents the companies, told reporters. "It is the government that has the burden of proof."

When asked whether the White House may have pressured DOJ, Petrocelli said: “If there is any proof there, I’m sure it will emerge." Such evidence would not bode well for the government, he said, adding that AT&T is not depending on that to win the case.