Donald Trump's transition team has reassured AT&T that its $85.4bn acquisition of Time Warner will be scrutinised without prejudice despite the president-elect vowing to block the deal because it concentrated too much "power in the hands of too few".
America's largest telecommunications group by market value has been encouraged by Mr Trump's appointments to his transition team of two former competition officials with a hands-off record on antitrust enforcement, people close to the company said.
Mr Trump picked as his antitrust advisers Joshua Wright, a former federal trade commissioner with traditional Republican views on competition policy, and David Higbee, who worked in the business-friendly administration of George W Bush.
After talking with the president-elect's team, AT&T executives are confident that their deal has a good chance of passing regulatory scrutiny, people informed about the conversation said.
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Critics of AT&T's acquisition argue that the telecom company can use its ownership of Time Warner content such as HBO, CNN and film franchise Harry Potter to favour its own users, restrict choice and increase prices. AT&T rejected the criticism saying that there is no overlap between the two businesses.
In October, Mr Trump singled out the transaction as "an example of the power structure I'm fighting. AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it's too much concentration of power in the hands of too few".
Despite his tough rhetoric during the campaign, antitrust experts said the appointments made by Mr Trump indicated that his views on competition have changed since the November election.
Mr Wright, executive director of the Global Antitrust Institute at George Mason University and senior counsel at Wilson, Sonsini, Goodrich & Rosati, recently wrote in the New York Times that using antitrust enforcement for political reasons, including protecting jobs or reducing the power of large corporations, was misguided.
"The new antimerger fervour is based on the presumption that they are never a good deal for consumers because more consolidation always leads to higher prices, and never leads to cost savings or product improvements that benefit consumers. Both are demonstrably false," wrote Mr Wright. He added: "A high level of concentration in an industry simply does not mean the industry lacks competition."
Erik Gordon, professor at University of Michigan's Ross School of Business, said that Mr Trump's administration would be less aggressive on competition than the Obama administration on enforcement but it would be tough on deals that could harm jobs.
"The Obama administration seemed to have an almost gut, visceral dislike of big powerful companies. I think the Trump administration doesn't have that," Mr Gordon said.
"[However], the slight populist streak in the Trump administration means that it will bring antitrust cases where it feels that mergers will hit small and midsize companies or will put a lot of people out of work," he added.
An antitrust lawyer who asked not to be named as he is close to members of Mr Trump's transition team said: "The most likely scenario is that he will make AT&T's life hard and will force them to make some onerous concession but at the end they will let the deal through."
Fears ebb of Trump blocking AT&T’s $85 billion Time Warner deal
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