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Analysis: AT&T/Time Warner furor likely to inspire legislation on deal reviews

As Democrats look to examine whether President Donald Trump tried to influence decision-making regarding AT&T Inc.'s $85.4 billion purchase of Time Warner Inc., antitrust experts said the effort is unlikely to impact the deal itself — though it may inspire legislation aimed at limiting White House interference in future merger reviews.

The AT&T/Time Warner deal is done. A federal appeals court on Feb. 26 rejected arguments from the U.S. Department of Justice alleging that a lower court judge ruled in error, and the DOJ has indicated it has no plans to pursue further appeals, ending a long battle over the merger. However, a March report in The New Yorker generated a fresh round of discussion about the deal process and whether President Trump tried to unduly influence the DOJ's attempts to block the deal.

SNL Image

An AT&T sign hangs above a retail store in New York.
Source: Associated Press

Cleveland State University law professor Chris Sagers, who specializes in antitrust and economics, said in an interview that he is not aware of any legal restraints on the role of the president in a merger review, so long as the president does not commit an independent crime. Sagers says the allegation described in The New Yorker report, which claims Trump ordered former economic adviser Gary Cohn to pressure the DOJ to file a lawsuit to possibly block the merger, is unlikely to be illegal.

"It is okay for the president to communicate with executive officers," Sagers said. "It's okay for the president even to communicate with them about pending law enforcement actions."

Trump's possible influence on the DOJ's attempts to block the deal — which some have suggested had to do with concerns about unfavorable news coverage by CNN, a network AT&T acquired as part of the Time Warner transaction — is a topic that had already generated interest with congressional Democrats. Rep. David Cicilline, D-R.I., who serves as chairman of the House Judiciary Committee's subcommittee on antitrust issues, told Variety in February that he did not think it was appropriate for the president to be "weighing in on particular transactions."

Cicilline declined to comment on the allegation in The New Yorker article.

On the Senate side, Sen. Chris Van Hollen, D-Md., said in a March 4 tweet that he would write to the DOJ about the allegations and work to make sure such presidential influence on M&A reviews does not happen in the future.

John Lopatka, a law professor at Pennsylvania State University who specializes in antitrust, believes a congressional probe into the matter would likely focus on preventing influence from the White House in future mergers.

"I would guess that what the House committee would be interested in is, if there was influence by the White House, or an attempt to influence a law enforcement decision by the antitrust division, Congress would possibly be interested in trying to prevent that in the future," said Lopatka, who was previously assistant director for planning for the Bureau of Competition at the U.S. Federal Trade Commission. "I don't think it would be retroactive; I think it would potentially lead to legislation or something else to prevent it from recurring, if they concluded that that's what happened."

Eleanor Fox, a professor of trade regulation at New York University School of Law and an expert on antitrust and competition policy, agreed that any congressional probe would not retroactively change anything for the AT&T/Time Warner deal.

"It would not have any impact on the outcome of it," she said. "It was tried on the merits and it was appealed on the merits."