Democrats Seek DOJ Antitrust Review of WarnerMedia-Discovery

Rep. Joaquin Castro of Texas, Sen. Elizabeth Warren of Massachusetts, House Antitrust Subcommittee Chairman David Cicilline of Rhode Island and Congressional Progressive Caucus Chair Rep. Pramila Jayapal of Washington led a Monday letter with 29 other congressional Democrats urging DOJ to investigate AT&T’s planned spinoff of WarnerMedia to Discovery for potential antitrust law violations. The letter to Attorney General Merrick Garland and DOJ Antitrust Division head Jonathan Kanter is the first major federal resistance to the deal, which is to close in mid-2022 (see 2110210052). “The merger threatens to enhance the market power of the combined firm and substantially lessen competition in the media and entertainment industry,” the Democrats wrote Garland and Kanter, saying DOJ must “conduct a thorough review of this transaction to ensure that it does not harm American consumers and workers by illegally harming competition.” The lawmakers want the department “to thoroughly" examine if WarnerMedia-Discovery "will reduce the amount of diverse and inclusive media and entertainment content.” A “more consolidated, less competitive marketplace may only reduce the competitive pressure on media companies to provide consumers with more diverse and inclusive programming,” they said. Other signers include Senate Communications Subcommittee Chairman Ben Ray Lujan of New Mexico and House Consumer Protection Subcommittee Chairwoman Jan Schakowsky of Illinois. AT&T CEO John Stankey said at a UBS investor conference the letter's concerns were "unfounded." Letters from members of Congress aren't unusual, and happen in most AT&T transactions due to the company's size and scope, he said. "There is always going to be those who have a different lens they want to put on something." AT&T has had "good and constructive discussions" with regulators, and the transaction so far is going to plan, he said. "I have seen nothing that has gone on in that process that is out of pattern or out of skew." The company should be able to publicly demonstrate progress in the regulatory review in Q1, he said. AT&T and Discovery didn’t comment further.