Buried in a New York Times profile of CNN chief Jeff Zucker was a brief comment from an unnamed official that could make the Trump administration’s already rough political road that much rockier.
“White House advisers have discussed a potential point of leverage over their adversary” CNN, the official told the Times’s Michael Grynbaum: “a pending merger between CNN’s parent company, Time Warner, and AT&T.”
There’s a threat implicit in that comment. CNN has emerged as the administration’s favorite media punching bag, and if it doesn’t start producing Trump-friendlier reporting, its parent company’s business plans might suffer.
Using the government’s antitrust powers against political opponents has been attempted by a president before, and it would be hard to prove that politics drove the final decision on whether Time Warner and AT&T should merge. But, that said, the administration is in a bind: If it does decide to contest the merger, its motivation for doing so will be suspect.
President Trump’s leverage over the AT&T-Time Warner proposal comes via the Justice Department, which is evaluating the merger on antitrust grounds. In the past, the department has insisted that parties to a merger include certain agreements to prevent anti-competitive behavior, said Steven Salop, a law professor at Georgetown University. For example, Salop said, the Comcast-NBC merger approved in 2011 included stipulations that Comcast could not withhold NBC content from its competitors, nor could it threaten NBC’s competitors with access to its distribution network. The final judgment in that case ran 33 pages.
The Justice Department can also sue to prevent a merger from being completed, as it did in 2016 to block the merger of health-care giants Humana and Aetna. This is the threat that looms over AT&T and Time Warner — a threat that looms over nearly any merger at this scale. What’s different is the idea that the threat might stem from the president’s anger at a Time Warner subsidiary.
“This idea that we would somehow punish CNN for political reasons by blocking a merger is just … it would be highly unusual and something that would be very hard to contemplate that it would happen,” said Columbia Law School professor Anu Bradford. But her bigger concern was about the precedent that would be set.
“The main thing that the U.S. has pronounced is that countries’ antitrust laws need to be equal in ways that are consistent with economic analysis,” Bradford said. Determining antitrust violations on the basis of political whims would undercut decades of American insistence on that principle, she said. The long-term danger is to U.S. companies, which might find themselves the targets of political retribution in other countries that then block international merger attempts.
In February, Salop and co-author Carl Shapiro wrote an analysis of antitrust policies under Trump for an industry magazine. In it, they contemplated the exact scenario presented by that unnamed White House source — precisely because it’s something that Trump had threatened on the campaign trail. Ultimately, they echoed Bradford’s concern.
“We certainly hope that the Trump administration (or any other administration) avoids the use of antitrust as a tool for political leverage or retribution, or even permits any appearance or hint of such an abuse of the rule of law in antitrust,” Salop and Shaprio wrote. “We fear that if the Trump administration does act in that manner, doing so would seriously undermine the legitimacy of U.S. antitrust enforcement. That would harm American antitrust institutions. In addition, it would weaken the ability of the United States to convince foreign jurisdictions to adopt the U.S. approach to antitrust.”
Damage to institutions aside, could Trump intervene to punish Time Warner?
“The [Department of Justice] and its assistant attorney general must follow the law,” Bradford said in an email, “and the U.S. antitrust laws do not allow for blocking the merger for political reasons — such as to pursue revenge against a news media organization. However, it us unlikely that the [department] would concede that their action was politically motivated, and it would be harder to claim illegality if they brought the case formally relying on some economic argument (even if the true motivation was different).” In other words: Justice probably would figure out an economic reason to object to the merger — just as Attorney General Jeff Sessions once cobbled together a rationale that provided cover for Trump to fire the director of the FBI.
And that’s the political problem for the White House: How do we know that’s not what they’re doing anyway? Salop pointed to several existing objections to the proposed merger, including from key Democrats and Consumers Union. There are any number of reasons that could be used to support a decision by the administration to block the merger, but by dangling the idea that one motive might be political, all possible motives come under suspicion.
That said, any attempt by the administration to block the merger would have to be approved by the courts. You may have noticed above that Justice’s objection to the Aetna-Humana merger took the form of a lawsuit; it wasn’t until this year that a court agreed to intervene. So an attempt by Trump’s administration to block Time Warner-AT&T would need at least enough rationalization to persuade a judge.
As mentioned above, a president has tried to use the review process for political purposes before, and the name of the president who did so will not surprise you. Salop and Shapiro wrote about it in their February analysis:
[M]ost telling was the Nixon administration’s delaying a threatened lawsuit against the three prominent TV networks as a way of obtaining more favorable news coverage of the administration. Apparently, the DOJ was considering an antitrust case against the networks involving ownership of “prime-time” programming. As reported by The Washington Post in 1997 when Nixon White House tapes relating to this matter were released, the tape transcript indicated that, “Nixon decided to have [Attorney General] Mitchell ‘hold it for a while, because [Nixon was] trying to get something out of the networks.’” As the President himself declared in the tape, “We don’t give a goddam about the economic gain. Our game here is solely political. . . . As far as screwing them is concerned, I’m very glad to do it.”
Still, that this was a point of concern at this moment was surprising to Bradford.
“This is something that I had not even thought about that there would be a question like this,” she said. “But every day is a new day.”