Merger Battles and Disgorgement

CNN?

What is going on with AT&T Inc.'s proposed acquisition of Time Warner Inc.? The most straightforward answer seems to be that the Department of Justice's antitrust division, which has a new director as of September, has decided that the merger might be anticompetitive and is seeking significant divestitures before it approves the deal. "The Justice Department brought up the idea of divesting either DirecTV, the satellite provider, or Turner Broadcasting, which includes CNN, TNT and TBS," reports Bloomberg News. The New York Times and the Wall Street Journal report similar demands, which make sense: The concern in a vertical media merger would be that one company would combine control of too much distribution capacity and too much content, and the way to remedy that would be to require the combined company to divest either a bunch of content or a bunch of distribution.