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MarketScreener Homepage  >  Equities  >  Nyse  >  AT&T Inc.    T

AT&T INC.

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Departing Antitrust Chief Backs Changes to Strengthen Enforcement

01/14/2021 | 06:22pm EST

By Brent Kendall

WASHINGTON -- The Justice Department's antitrust chief, Makan Delrahim, has presided over a tumultuous time for the enforcement of U.S. competition law.

Appointed by President Trump in 2017, Mr. Delrahim's tenure began with a sweeping loss: a court rejection of his division's challenge to AT&T Inc.'s acquisition of Time Warner, a case clouded by the president's repeated criticisms of the deal. He finishes with a win, as Visa Inc. this week walked away from a $5.3 billion deal to buy an up-and-coming fintech firm after the Justice Department challenged it using a progressive legal theory about protecting future competition in the online-payments space.

Those bookends highlight a tenure in which Mr. Delrahim at times sometimes bucked expectations. The AT&T and Visa cases were aggressive enforcement actions that light-touch Republicans of earlier administrations likely wouldn't have embraced. He also built internal momentum for the Justice Department's examination of dominant tech companies. But he took a decidedly conservative approach on some matters, including by allowing T-Mobile US Inc. and Sprint Corp. to merge after the Obama administration wouldn't. Mr. Delrahim also faced allegations that some of the department's antitrust work was politicized in the Trump era, claims he denies.

"We were appropriately tough," Mr. Delrahim said Wednesday in an interview with The Wall Street Journal ahead of his departure next week.

Amid a debate about whether current U.S. antitrust law sufficiently protects competition -- as well as consumers -- Mr. Delrahim said there is merit to some legislative proposals for strengthening enforcement. It would be reasonable, he said, for Congress to place more of a legal burden on companies with 50% or greater market share to prove that their future acquisitions in that market wouldn't harm consumers.

"That's a small change that could have a real positive impact with respect to concentration in the marketplace," Mr. Delrahim said.

He also said Congress should revisit a 2018 Supreme Court ruling that rejected a government antitrust challenge to American Express Co.'s rules for merchants, on the theory that the rules had benefits for consumers. That logic could hamper enforcers in cases where companies serve both consumers and other businesses, he said.

Mr. Delrahim's tenure came during a national discussion about whether the government should rein in a handful of dominant tech companies. After years of anticipation, Alphabet Inc.'s Google and Facebook Inc. were each hit with sweeping government lawsuits in 2020. Both companies deny they have engaged in anticompetitive conduct.

Mr. Delrahim in 2019 opened the department's monopolization investigation of Google and gave speeches arguing that antitrust enforcers could target companies that offer free services by focusing on nonpricing issues like innovation and consumer choice. Generally enforcers have measured consumer harm by whether the prices are likely to rise. As the probe progressed and then-Attorney General William Barr played a more active role, Mr. Delrahim recused himself in light of some long-ago work he did for Google while in private practice.

He declined to comment on the specifics of the case, but suggested the slow pace of litigation -- the department's Google case isn't scheduled to go to trial until 2023 -- means other avenues may be needed to address tech-sector competition.

He suggested one possible approach: a hybrid public-private body that could set rules for tech-sector conduct. "If there is anticompetitive conduct shown, business models and technology change so rapidly that you have too much harm before there's a [legal] remedy at the end," Mr. Delrahim said.

Separately, Mr. Delrahim presided over the antitrust division at a time when it brought criminal price-fixing charges against generic-drug makers and chicken producers. "I'd be surprised if we're done," he said about the department's ongoing chicken probe.

The department this month also brought its first-ever criminal case against a company for allegedly conspiring with rivals not to hire each other's workers. The defendant, Surgical Care Affiliates, a subsidiary of UnitedHealth Group Inc., said the charges were an unjustified and novel application of the antitrust laws as they relate to employee recruitment.

Mr. Delrahim's division focused enforcement attention on a wide range of competition issues that caught his eye, from rules for the Academy Awards -- he was concerned a now-withdrawn rule change would have excluded Netflix Inc. titles from the Oscars -- to NCAA limits on benefits for college athletes, an issue that remains unsettled.

That approach, however, sometimes brought him difficulties. After four auto makers reached a tailpipe-emissions deal in 2019 with the state of California, Mr. Delrahim's division questioned whether the companies improperly colluded to reach the pact. State officials and Democratic lawmakers criticized the Justice Department for investigating, saying it was politically motivated to harm companies that defied the Trump administration's more lenient approach to fuel-efficiency standards.

Mr. Delrahim in Senate testimony said the department was engaged in a fact-finding effort and wasn't doing Mr. Trump's bidding. The department closed the investigation last year, finding no evidence of collusion.

Mr. Delrahim said he had few regrets and accomplished most of what he set out to do. He highlighted one item of unfinished business: modernizing music-licensing rules, which have been governed by decades-old antitrust settlements dictating how music is licensed for play on radio, television, streaming services or in venues like restaurants.

It is important for the government to ensure that artists are fairly compensated, he noted, but any needed changes were "very difficult to do in the time we had."

The AT&T case may remain Mr. Delrahim's best-known endeavor, and one that it is clear he has pondered in the years since U.S. District Judge Richard Leon ruled in 2018 that the government had not come close to proving the deal would harm the pay-TV industry.

AT&T questioned the Justice Department's motivations for suing in light of Mr. Trump's opposition to the Time Warner deal, and because the two companies weren't head-to-head competitors.

Mr. Delrahim said he still believes the case was sound, "and I think the marketplace is bearing that out." The consumer benefits of the deal that AT&T touted in court, like skinny, low-cost pay-TV bundles, haven't been sustainable, he said.

An AT&T spokesman declined to comment.

Write to Brent Kendall at brent.kendall@wsj.com

(END) Dow Jones Newswires

01-14-21 1821ET

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ALPHABET INC. 0.30% 2021.91 Delayed Quote.15.36%
AMERICAN EXPRESS COMPANY -1.33% 135.26 Delayed Quote.11.87%
AT&T INC. -2.58% 27.89 Delayed Quote.-3.03%
FACEBOOK INC 1.15% 257.62 Delayed Quote.-5.69%
LONDON BRENT OIL -3.79% 64.4 Delayed Quote.29.48%
NETFLIX, INC. -1.44% 538.85 Delayed Quote.-0.35%
T-MOBILE US -0.76% 119.97 Delayed Quote.-11.03%
UNITEDHEALTH GROUP 1.02% 332.22 Delayed Quote.-5.26%
VISA INC. -0.64% 212.39 Delayed Quote.-2.90%
WTI -2.98% 61.53 Delayed Quote.31.62%
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Financials (USD)
Sales 2020 171 B - -
Net income 2020 12 623 M - -
Net Debt 2020 144 B - -
P/E ratio 2020 16,3x
Yield 2020 7,48%
Capitalization 199 B 199 B -
EV / Sales 2020 2,01x
EV / Sales 2021 2,05x
Nbr of Employees 230 760
Free-Float 93,4%
Chart AT&T INC.
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AT&T Inc. Technical Analysis Chart | T | US00206R1023 | MarketScreener
Technical analysis trends AT&T INC.
Short TermMid-TermLong Term
TrendsBearishNeutralNeutral
Income Statement Evolution
Consensus
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Mean consensus HOLD
Number of Analysts 30
Average target price 31,09 $
Last Close Price 27,89 $
Spread / Highest target 54,2%
Spread / Average Target 11,5%
Spread / Lowest Target -42,6%
EPS Revisions
Managers and Directors
NameTitle
John T. Stankey President, CEO, COO & Director
John J. Stephens Chief Financial Officer & Senior Executive VP
William E. Kennard Independent Chairman
David S. Huntley Chief Compliance Officer & Senior Executive VP
Matthew K. Rose Lead Independent Director
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