AT&T CEO defends Time Warner merger in court
AT&T CEO Randall Stephenson took the stand Thursday to defend his company’s $85 billion merger with Time Warner, arguing that the deal will allow AT&T to deliver targeted advertisements like other companies such as Facebook and Google.
But Craig Conrath of the Justice Department pushed back, noting that AT&T’s advertising revenue has increased in recent years, while the company at the same time has charged more for pay-TV subscriptions.
The prosecutor also argued that even with AT&T’s purchase of Time Warner, the combined company would not be competing directly with internet streaming platforms. Conrath noted that companies like Amazon and Netflix don’t have the live news and sports offerings that are among Time Warner’s signature products.
The AT&T CEO responded by saying that half of millennials don’t want that programming enough to subscribe to cable or satellite television.
And while Stephenson argued that those companies engage in vertical functions — producing original content and operating platforms to distribute it — Conrath pointed out that they still must rely on internet providers like AT&T to make sure users can access their content.
Pressed by Conrath about the targeted advertising practices, Stephenson admitted that AT&T would track customers’ location and browsing activity in order to deliver ads that would be relevant to them. He said that users would have to give their permission in order for the company to submit to this data collection.
Time Warner CEO Jeff Bewkes testified in court Wednesday making similar arguments that the merger of the two companies is essential to compete with internet giants and called the Justice Department’s argument against the deal “ridiculous.”
The Justice Department sued to block the merger in November, arguing that combining the telecom giant with an entertainment company like Time Warner — which owns channels including CNN, HBO, TNT and TBS — could hurt competition, with AT&T having the incentive to charge more for that programming to other distributors.
The trial began in March and is expected to wrap up in the coming weeks.
Updated: 5:50 p.m.
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