Thirty-three U.S. representatives and senators, all Democrats, have asked the Department of Justice to investigate the proposed merger of two media giants, Discovery Inc. and WarnerMedia, for possible violations of antitrust laws. The $43 billion deal not only would harm competition and workers, but would lead to less racial representation in the media and entertainment industry, a Dec. 6 letter from the group maintains. AT&T, which owns WarnerMedia, announced its intentions do spinoff the media company and merge it with Discovery in May.
The call for DOJ scrutiny is being led by Rep. Joaquin Castro (TX-20), Sen. Elizabeth Warren (MA), Rep. David Cicilline (RI-01), Chair of the Antitrust Subcommittee, Rep. Pramila Jayapal (WA-07), Chair of the Congressional Progressive Caucus. The letter was sent to U.S. Attorney General Merrick B. Garland and Assistant Attorney General Jonathan Kanter.
The letter reminds the DOJ of President Biden’s Executive Order 14036 to promote competition across the U.S. economy. The Order said that “excessive market concentration threatens basic economic liberties, democratic accountability, and the welfare of workers, farmers, small businesses, startups, and consumers.” The president urged the DOJ’s vigorous enforcement of antitrust laws and to even challenge consummated mergers if they were anti-competitive.
According to Variety, “The deal will bring Warner Bros., HBO and HBO Max, CNN, TNT, TBS and other Turner networks together with Discovery’s global suite of lifestyle, unscripted and how-to channels. The goal behind bulking up is to make the enlarged company a more formidable competitor in the global streaming race with Netflix, Disney, Amazon and others. AT&T is eager to send WarnerMedia to a new home through the spinoff that leaves AT&T shareholders with 71% of the equity in the new company, to be run by Discovery’s management team.”
AT&T CEO John Stankey responded that the allegations lodged in opposition to the deal are “really unfounded” and expressed confidence that the deal would get done. He said the deal would help boost the value its streaming service HBO Max.