AZUZ: A trial is going on right now that'sclosely being watched by companies and legalexperts around America. AT&T is trying tobuy Time Warner, the parent company of CNN, formore than $85 billion.
Today, AT&T is a large wireless company andsatellite TV distributor. But what it does nothave is content programming and entertainment. And that's why it wants Time Warner, which includes CNN, HBO, Warner Brothers, TNT and TBS.
The merger would be one of the biggest media deals in history, but the U.S. governmentis trying to block it and one big question is, will the merger break U.S. antitrustlaws, which are designed to keep American companies from having too much control overthe market.
HADAS GOLD, CNNMONEY: The antitrust case of the decade is here. It's a case thatwill be thought in law schools for years to come.
Back in 2016, when AT&T announced plans to buy Time Warner, which, yes, owns CNN, most media analysts assumed that the deal would be approved.
After all, it's a vertical merger. That means it's two companies that don't directlycompete with one another.
Think of it like a shoe company buying the leather manufacturer. So, a year later, when the Justice Department sued to block the $85 billion bid, it was a big deal.
UNIDENTIFIED FEMALE: Breaking news here, the Justice Department is said to file alawsuit to block AT&T's takeover of Time Warner.
GOLD: At first, AT&T claimed selective enforcement, basically saying that it waspersonal between the president and CNN. But now, it's unlikely we'll even hear thewords "Donald Trump" during this trial. A judge blocked AT&T's request to usemessages between the administration and regulators about the merger. So, the companywill not be using the political bias argument in court. Instead, we're in for a battlefought on more traditional antitrust grounds.
The Justice Department says the combination of AT&T and Time Warner will lead tohigher prices for consumers, and it argues AT&T could hog its content, must-haveslike sports and news, by not making it available to outside distribution. AT&Targues that it needs this merger to better compete with upstarts like Facebook, Amazonand Netflix. It says there's no evidence prices will go up and that they won'twithhold content from anybody, because then they'd make less money.
It's not just AT&T and Time Warner who care about the outcome of this case. Othermedia companies considering mergers like Disney and 21st Century Fox are watchingcarefully.
If the Justice Department succeeds in blocking the merger, some see signals of a newera of government scrutiny. That might stop some future deals from going forward.
That's why this case could change the course of media industry history.