News Room

When Antitrust Law Turns Anti-Consumer

Written on behalf of Brian Kabateck
June 15, 2018

Consumers know that choice equals power, and consumer advocates who fight for consumers have seen choices slowly but surely disappear over the last twenty years. With a federal court’s approval of the AT&T merger with Time Warner, consumers just lost a heck of a lot more choices.

U.S. District Judge Richard Leon (not unsurprisingly an appointee of George W. Bush) ruled in favor of the merger and rejected allegations by the Justice Department that the deal would ruin competition in the pay-TV industry. The judge ruled that attorneys for the federal government had not proven their case against the merger, but it seems like common sense that when a consumer has fewer options available to him/her, it is a negative.

The deal, pending since 2016, is worth an estimated $80 billion and puts AT&T at the top of the pay-TV distribution list. Now, under one roof will be CNN, TBS, HBO, and TNT, among others. Under one roof will now exist DirecTV, NBCUniversal and many more. Worse, it hands the Justice Department a defeat that could lead to the government refusing to challenge other such deals. In fact, Comcast is already planning on acquiring 21st Century Fox’s assets and entertainment giant Walt Disney Co. is also on the market now.

Truthfully, this is old hat for AT&T. The telephonic giant was formerly known as Ma Bell which was one of the worst conglomerates in the history of the United States. This decision harkens back to a time when America had a severely limited number of oil, railroad and steel companies, all of which ruined the lives of workers, consumers and others. This new AT&T/Time Warner corporation will be focused on profits and we can be sure there will be a large round of layoffs coming from the newly merged behemoth.

Antitrust law in the United States governs competition and dictates that no company should have a monopoly or too much of the market, or at least that’s the theory. Several federal laws have been passed over the years to battle trusts (monopolies) and benefit the American public. The Sherman Act, the Federal Trade Commission Act and the Clayton Act all govern different areas of how corporations can merge and more. Normally, the DOJ will step in when a company attempts to purchase a direct competitor, but in this instance Time Warner and AT&T do not directly compete. In an attempt to do corporate battle with Netflix, Amazon and other online content providers, AT&T purchased Time Warner so that they now have access to both the technology to provide content and the content itself.

While the impact remains to be seen, expect this to launch a series of mergers and acquisitions within the content delivery sphere as well as mass layoffs in the tens of thousands. When two large companies merge, they often do away with large portions of administrative, IT and marketing support.

To read the Court’s decision for yourself, click here:

Consumer protection laws are designed to ensure the rights of vulnerable consumers in society. The laws are a form of government directive intended to protect the rights of consumers.

Among some of these protection laws are the Federal Food, Drug, and Cosmetic Act, Fair Debt Collection Practices Act, the Fair Credit Reporting Act, Truth in Lending Act, Fair Credit Billing Act, the Uniform Deceptive Trade Practices Act and Business and Professions Code 17200.

Our firm is committed to standing up to big businesses that engage in fraud or unfair practices from gaining an advantage over competitors. This includes protecting the public from false or misleading advertising in situations like “bait and switch” advertising tactics, warranty misrepresentation, defective products, forced arbitration clauses and identity theft. Class action lawsuits can provide recourse for consumers whose rights have been violated by companies that engage in abusive business practices.

If you believe you and many others like you have been somehow injured, cheated, or otherwise harmed by unfair business practices, give us a call and let us help you protect your rights. At Kabateck LLP, we can help you explore all of your options and ultimately achieve for you the maximum compensation for your harm.