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Consumers Union on AT&T/Time-Warner: “When These Companies Get Bigger, They Don’t Get Better”

Tuesday, June 12, 2018

WASHINGTON, D.C. — A federal judge today approved the merger of AT&T and Time Warner, combining one of the largest wireless and video providers with one of the largest content producers. Today’s decision is expected to set off a spate of similar media mergers, with Comcast reportedly set to announce plans to purchase 21st Century Fox as soon as tomorrow.

Consumers Union, the advocacy division of Consumer Reports, shared the Department of Justice’s concerns that the deal could potentially hurt competition and limit consumer choice. Today’s ruling, according to the consumer group, will not only give AT&T an unprecedented hold over both premium content and distribution, but also further drive consolidation in a market already dominated by a few massive companies that continue to grow their power.

“Allowing these two giants to merge hands AT&T control of not only the largest distribution platform, but some of the most valuable content on television today. There is significant opportunity for AT&T to exploit the value of Time Warner’s content in ways that could hurt both consumers and competition alike. This merger, combined with the repeal of net neutrality protections earlier this week, is a big loss for consumers,” said Jonathan Schwantes, senior policy counsel for Consumers Union.

“Moreover, today’s decision might as well have pulled the trigger on the starting gun for the race to consolidate, with other huge, similar mergers on the horizon. Unfortunately, history has shown us that when these telecom companies get bigger, they don’t get better. Comcast’s reported bid to purchase 21st Century Fox is cause for consumer concern, especially as the company failed to live up to the conditions of its last mega-merger — and those conditions are set to expire later this year. Consumers are finally starting to see some competition in the video market, with new, innovative over-the-top streaming services. But today’s decision could effectively extinguish that trend, with consumers losing out on these innovative platforms who simply can’t compete with these massive companies without raising prices,” Schwantes added.