Trump and Warren Find Common Ground on Antitrust

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Senator Elizabeth Warren last month. In a speech on Wednesday, she said past federal agreements to allow certain mergers had been “epic failures.”

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Mark Wilson/Getty Images

President Trump and Senator Elizabeth Warren make odd antitrust bedfellows. Ms. Warren, the Massachusetts Democrat, says megadeals like Aetna’s $77 billion sale to CVS could kill competition. She also backs the Justice Department’s fight against an AT&T-Time Warner merger and has concerns about past merger remedies. That puts her in the same camp as the president.

She laid out her views on deal making in a speech on Wednesday. AT&T’s $85 billion acquisition of Time Warner, she said, would mean higher prices, fewer choices and worse service for consumers. That echoes Mr. Trump’s antitrust chief, Makan Delrahim, and the Justice Department’s November lawsuit to block the deal, which asserted that the merger would leave millions of television viewers paying more and would slow innovations like video streaming.

Ms. Warren also said past concession agreements that allowed certain mergers to go forward had been “epic failures.” That almost feels like a hat tip to Mr. Delrahim, who in a speech last month said past behavioral remedies to address antitrust concerns had not worked out as planned and had been difficult to enforce. He cited Comcast’s takeover of NBCUniversal as an example, adding extra execution risk to vertical mergers in which deal partners don’t directly compete.

His tough stance surprised the corporate sector, which had expected easier deal reviews under the Trump administration. It’s also rare for vertical mergers, like AT&T’s acquisition of Time Warner, to face court challenges since they are usually approved with conditions.

Ms. Warren argued that big vertical deals needed to be viewed as critically as horizontal mergers and said Aetna’s sale to CVS would be a test for antitrust enforcers. It’s unclear whether the Justice Department, which reviews insurance-industry deals, or the Federal Trade Commission, which assesses the pharmaceutical and retail sectors, has jurisdiction over the merger.

Ms. Warren did admit she was worried about whether the Justice Department’s AT&T lawsuit was politically motivated given Mr. Trump’s attacks on CNN, which Time Warner owns. She also branded Mr. Delrahim as someone with a “long record” of backing bad mergers. Still, in rare praise of the Trump administration, Ms. Warren said the Justice Department’s move to block the AT&T-Time Warner deal was “a good step.” Such an alliance of convenience puts more pressure on big M&A.

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