President Trump knew right away how he felt about AT&T’s proposed $85 billion acquisition of Time Warner. He hated it.
“It’s too much concentration of power in the hands of too few,” Trump said on the day the deal was struck in October 2016, adding that, if he were elected, his administration would block the purchase.
Judge Richard Leon considered the matter for several months and in a lengthy opinion Tuesday ruled that Trump’s take, shot from the hip, was off the mark. The merger of media giants can move forward, despite legal objections by the Justice Department.
Trump often touts his instincts, particularly in the dealmaking realm. “My whole life has been deals,” the president said earlier Tuesday in Singapore when asked how he could know whether North Korea is serious about its stated commitment to denuclearize. “I just feel very strongly — my instinct, my ability or talent — they want to make a deal."
Yet in the AT&T-Time Warner case — a question of antitrust law, not a clash of personalities — the president’s gut steered him wrong and might have contributed to a high-profile defeat for his Justice Department.
Rudolph W. Giuliani, one of Trump’s personal attorneys, insisted last month that the president did not pressure the Justice Department to file the lawsuit that led to Tuesday’s ruling.
“He told me directly he didn’t interfere,” Giuliani told CNN.
By then, however, Giuliani was doing damage control after appearing to let slip that Trump had, in fact, directed his administration’s opposition to the deal.
“The president denied the merger,” Giuliani had told HuffPost, suggesting Trump, rather than Attorney General Jeff Sessions, made the decision to sue.
Whether Trump gave an order or not, it would have been easy for Sessions, a frequent target of public criticism by Trump, to know how to please the president. And there are several reasons to think it was Trump who, directly or indirectly, sent the Justice Department on a doomed mission.
For one thing, as Vanderbilt Law School professor Rebecca Haw Allensworth told the Fix when the lawsuit was filed, the Justice Department made “the kind of argument that hasn’t been made by any Republican, conservative administration ever.” Trump, far more than Sessions, likes to flout GOP orthodoxy.
For another thing, “vertical mergers are almost never challenged,” Penn Law School professor Christopher S. Yoo told me.
A “vertical” merger combines companies that represent different links in a supply chain. Time Warner produces content; AT&T distributes content. An example of a “horizontal” merger would be the purchase of one content producer by another. Horizontal mergers typically receive more regulatory scrutiny because they tend to leave consumers with fewer options.
There is one more thing, too: As he staked his position 20 months ago, Trump noted that the proposed deal involved his least-favorite TV channel, CNN. As the case progressed, the president derided CNN as “fake news” and said the job of its president, Jeff Zucker, is in jeopardy. Trump seems to feel betrayed by Zucker, with whom he worked on “The Apprentice” at NBC.
Trump also came out in favor of another media merger, Disney’s proposed $52 billion acquisition of most of 21st Century Fox, which is owned by Fox News boss Rupert Murdoch. The president’s inconsistent views may have been influenced, in part, by personal preferences.
It is hard to imagine that Sessions, left to his own devices, would have brought such an unusual case that eschewed Republican business principles. Trump made a snap judgment, as a candidate, and when the Justice Department followed through on his wishes, the result was a major loss.