WASHINGTON-The Ministry of Justice, which has its last lawsuit against
AT & T
Planned acquisition of
on Monday called on a judge to consider "alternative" remedies if he decides not to block the merger directly.
Attorney of the Ministry of Justice
He tried in 75 minutes to reach the final argument that he would hear all antitrust lawsuits against the business, and told the district judge
that he should block the transaction, because it would lead to hundreds of millions of dollars in higher prices for consumers.
But Mr. Conrath also presented an alternative position for the government: If the judge decides not to block the entire business, He should consider forcing AT & T to "partial divestment," the lawyer said, meaning that the company could not keep all the assets of Time Warner.
Mr. Conrath said Judge Leon might consider allowing AT & T to buy parts of Time Warner, but not the Turner networks, which are a focus in the government case. He also expressed the possibility that the judge might require other types of "structural" changes to mitigate the impact of the agreement on consumers.
The Department of Justice has made similar proposals to AT & T during talks before the government filed suit in November. AT & T, which denies that their Time Warner acquisition will harm consumers, rejected the idea of making such changes to the deal because their executives did not believe they were needed.
The department had not made such explicit fallback arguments until Monday Judge Leon
Mr. Conrath said during his presentation that the "critical fact" of the process was that AT & T could leverage Time Warner's Turner networks such as TNT and CNN to force competing pay-TV providers to pay higher prices. That would make these rivals weaker competitors for AT & Ts DirecTV, he said.
Judge Leon, who did not speak much during the presentation, interrupted the lawyer at this key point and asked what government evidence supported this.
Mr. Conrath cited a number of industry witnesses who had appeared in court, such as
and expressed concerns over AT & T with Turner as leverage.
The Justice Department's opinion came after six weeks of legal action that has led some observers to believe that AT & T and Time Warner have made progress. But Mr. Conrath indicated at the lectern that Judge Leon had asked both sides to address the issue of remedial action in their judicial review courts if the judge finds that the transaction raises competition concerns. Judge Leon did not make such an order on public court record.
The final arguments continue on Monday afternoon when AT & T and Time Warner get a chance to finally defend their deal.
Write to Brent Kendall at [email protected]