WASHINGTON, May 13, 2018 – AT&T CEO Randall Stephenson on Friday announced that the company was parting ways with the executive responsible for hiring Trump “fixer” Michael Cohen in an apparent effort to grease the skids for the company’s merger with Time-Warner.
The revelations of the AT&T payment to Cohen revived questions over whether Trump punished the company by ordering a Justice Department lawsuit to block its merger with Time-Warner.
The announcement ended a week of media scrutiny for the telecom giant. In a letter distributed to employees in which he acknowledged that the $600,000 contract with Cohen for advice on the pending merger, Stephenson admitted it had been “for all the wrong reasons” and was “a big mistake.”
“To be clear, everything we did was done according to the law and entirely legitimate,” Stephenson wrote. “But the fact is, our past association with Cohen was a serious misjudgment.”
Vowing to “do better,” Stephenson took responsibility for the vetting failure that had led to Cohen being brought on board as a “political consultant” despite being a personal injury lawyer with no experience in telecommunications or mergers and acquisitions law.
Stephenson also announced that the executive most directly responsible for the decision — Executive Vice President for External and Legislative Affairs Bob Quinn — will retire, and that AT&T’s internal lobby shop will report to General Counsel David McAfee “for the foreseeable future.”
Cohen offered insights into the incoming administration
According to a representative in AT&T’s Washington office, Cohen pitched his services to the company during the transition period between Trump’s November 2016 election victory and the January 2017 inauguration.
Cohen told AT&T executives that he was leaving the Trump Organization to consult for a small number of companies, to which he’d provide information on “key players” within the administration and their priorities, as well as insights into “how they think.”
Companies often retain persons close to an incoming presidential administration as consultants or lobbyists. Because former Secretary of State Hillary Clinton was widely expected to win the 2016 election, many such organizations were unprepared for dealing with a Trump White House.
Cohen took full advantage of AT&T’s electoral miscalculation, and despite his lack of total lack of qualifications — apart from a relationship with the incoming president — the decision was made to hire Cohen at a rate of $50,000 per month.
While his contract expressly forbade lobbying activity unless he’d notified the company beforehand, AT&T never asked him to set up meetings, nor did he set any up himself.
AT&T also revealed Friday that Special Counsel Robert Mueller and his team knew about the payments as of November 2017, when his office contacted the company for information as part of the ongoing probe into Russian interference in the 2016 election.
The AT&T representative indicated that there’d been no further contact with Mueller’s office since December of last year and that the company “considers the matter closed.”
The company’s relationship with Cohen became public after attorney Michael Avenatti, who currently represents adult film actress Stormy Daniels in a lawsuit against the president, released documents detailing how AT&T paid Cohen.
The company funneled the money through Essential Consultants LLC, a Delaware-based shell corporation he’d established as a vehicle through which he paid Clifford $130,000 just before the 2016 election in exchange for her not revealing a prior sexual relationship with Trump.
Cohen payments put DOJ effort to block merger back in the spotlight
Stephenson’s admission that AT&T hired Cohen to potentially leverage his relationship with Trump once again raised the question of whether the president personally intervened in the company’s merger with Time-Warner, which owns the cable news outlet CNN, a frequent target of his ire.
Trump has often spoken of his desire to personally direct the Justice Department’s operations and had frequently launched specific attacks on CNN’s coverage of him over the course of his 2016 campaign.
Trump specifically invoked CNN when he promised to block the merger
His public feud with CNN has led to questions whether he would retaliate by following through on a campaign promise to block the AT&T-Time-Warner merger, which he promised to do at an October 2016 campaign rally in Gettysburg, Pennsylvania, days after the deal was announced.
“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,” Trump said.
His fury at CNN for the negative stories it reported about his campaign and wall-to-wall press coverage sparked by its reporting on the dossier and the intelligence community assessment was even more evident at his final news conference before taking office, during which he refused to take questions from CNN’s Jim Acosta, who he angrily dismissed as “fake news.”
While some dismissed Trump’s attacks on CNN and his comments about the merger as yet another example of Trumpian bluster, the questions over whether he’d intervened personally took on a new life last November when the Justice Department filed a lawsuit to block the merger.
The DOJ lawsuit raised eyebrows because vertical mergers are rarely challenged
The lawsuit is unusual because the DOJ rarely intervenes in so-called “vertical” mergers between companies that represent two links in a supply chain, such as Time-Warner (which produces news and entertainment content) and AT&T (which owns the infrastructure to deliver it to consumers).
When the Justice Department intervenes in a merger on antitrust grounds, it is usually a “horizontal” merger, which joins two competitors in the same industry.
Because such mergers are often more closely reviewed by regulators, the Trump administration’s intervention in the vertical one between AT&T and Time-Warner became even noticeable when Federal Communications Commission Chairman Ajit Pai began taking actions to facilitate broadcast TV giant Sinclair Broadcasting’s purchase of Tribune Media, even though regulators would traditionally be more skeptical of such a deal, which would give Sinclair control of far more stations than allowed under current media ownership rules.
Trump has publicly praised Sinclair, and Sinclair often returns the favor
Even as Trump has attacked and threatened CNN along with most other major media outlets that cover his administration, he has repeatedly praised Sinclair’s coverage, which he has called “far superior to CNN and even more fake NBC.”
Sinclair, which is based in Hunt Valley, Maryland, is notorious for forcing its local stations to air “must run” political content reflecting its owners’ conservative views.
Many of these segments are commentaries by the company’s “chief political analyst,” Boris Epshteyn, in which the former White House staffer obsequiously defends the administration from which he resigned after less than three months service. Another “must-run” segment which was met with widespread ridicule and criticism forced Sinclair’s local anchors to denounce “fake stories” and journalists who “use their platforms to push their own personal bias and agenda to control what people think” as “dangerous to our democracy.”
Once again, Giuliani makes things worse
Trump’s attacks on outlets that report stories which are unflattering to him or his administration gave rise to suspicions that he had involved himself in the decision to try and block the AT&T/Time-Warner merger. Those were allegations the White House strongly denied at the time.
But Trump attorney Rudolph Giuliani reignited the controversy Friday when addressing whether AT&T’s decision to hire Cohen was the kind of “swampy” behavior that Trump had promised to end.
Giuliani echoed a statement by White House Press Secretary Sarah Huckabee Sanders, who on Friday told reporters that Trump wasn’t affected by AT&T’s payments to Cohen because the Justice Department was opposing the merger.
But in an interview with The Huffington Post, Giuliani went further by suggesting that the president had personally intervened to block it, contradicting the White House’s prior assertions that Trump wasn’t involved.
“He did drain the swamp…the president denied the merger,” Giuliani said. “They didn’t get the result they wanted.”
The former New York City mayor — who resigned from his law firm this week over his representation of the president — attempted to walk back his statement on Saturday, telling CNN that Trump personally told him that he did not interfere.
The president also weighed in with a tweet late Friday, attributing the opposition to “the Trump Administration’s Anti-Trust Division,” and suggesting that his administration’s opposition to the merger was going unreported.
Public Interest Groups Urge Passage of Six Antitrust Bills Targeting Big Tech
Nearly 60 public interest groups signed a letter to House leaders to call a vote on six antitrust bills.
WASHINGTON, September 2, 2021 – Nearly 60 public interest groups signed a letter Thursday urging the House party leaders to push for a vote on six antirust bills that cleared the House judiciary committee in June.
The goal of the six bills is to rein in the power of Big Tech through new antirust liability provisions, including new merger and acquisition review, measures to prevent anticompetitive activity, and providing government enforcers more power to break-up or separate big businesses. They include American Choice and Innovation Online Act, H.R. 3816, Platform Competition and Opportunity Act, H.R. 3826, Ending Platform Monopolies Act, H.R. 3825, Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act, H.R. 3849, Merger Filing Fee Modernization Act, H.R. 3843, and State Antitrust Enforcement Venue Act, H.R. 3460.
The letter, which was directed at House Speaker Nancy Pelosi, D-California, and House Minority Leader Kevin McCarthy, R-California, were promoting a package of six bills that were the result of a two-year bipartisan investigation that included 10 hearings, featuring the testimony of the CEOs of the major tech companies, 240 interviews, 1.3 million documents and a 450-page report, the letter notes.
“We believe that these bills will bring urgently needed change and accountability to these companies and an industry that most Americans agree is already doing great harm to our democracy,” the letter said. Public Citizen was the first of the 58 groups on the letter.
America has a monopoly problem. Monopoly power lowers wages, reduces innovation and entrepreneurship, exacerbates income and regional inequality, undermines the free press and access to information, and perpetuates toxic systems of racial, gender, and class dominance,” the letter alleged.
“Big Tech monopolies are at the center of many of these problems,” it continued. “Reining in these companies is an essential first step to reverse the damage of concentrated corporate power throughout our economy. The bills that passed out of the House Judiciary Committee, with bipartisan support, do just that and it is imperative that they move forward in the House.”
List of signatories:
- Public Citizen
- Accountable Tech
- Action Center on Race & the Economy
- ALIGN: The Alliance for a Greater New York
- Alliance for Pharmacy Compounding
- American Booksellers Association
- American Family Voices
- American Independent Business Alliance
- American Specialty Toy Retailing Association
- Artist Rights Alliance
- Cambridge Local First
- Center for American Progress
- Center for Digital Democracy
- Center for Popular Democracy
- Committee to Support the Antitrust Laws
- Decode Democracy
- Electronic Frontier Foundation
- Friends of the Earth
- Future of Music Coalition
- Gig Workers Rising
- Global Exchange
- Indivisible Georgia Coalition
- Indivisible Hawaii
- Indivisible Ulster/NY19
- Institute for Local Self-Reliance
- International Brotherhood of Teamsters
- Jobs With Justice
- Kairos Action
- Local First Arizona
- Louisville Independent Business Alliance
- Main Street Alliance
- Mainers for Accountable Leadership
- Media Alliance
- Metropolitan Washington Council, AFL-CIO
- National Employment Law Project
- New York Communities For Change
- New York Communities for Change
- North American Hardware and Paint Association
- Open Markets Institute
- Our Revolution
- PowerSwitch Action
- Public Knowledge
- Running Industry Association
- Secure Elections Network
- Service Employees International Union
- Shop Local Raleigh/Greater Raleigh Merchants Association
- SIMBA (Spokane Independent Metro Business Alliance)
- Small Business Rising
- Stand Up Nashville
- StayLocal, an initiative of Urban Conservancy
- Strategic Organizing Center
- The Democratic Coalition
- Venice Resistance
- Warehouse workers for justice
FTC Commissioner Phillips Warns About Shifting Direction of Agency
Noah Phillips voiced concern about the scope and practices of the Biden administration’s FTC.
WASHINGTON, September 2, 2021 — Federal Trade Commissioner Noah Phillips said at a Hudson Institute webinar on Monday that he’s concerned about the direction the competition watchdog is moving toward considering recent events.
Phillips said the left-leaning voices in Washington and the appointment of Lina Khan to chair the agency has left him wondering about the legacy of the last 40 years of competition regulation in America – which have been hallmarked by the Hart-Scott-Rodino Antitrust Improvements Act of 1976. That legislation effectively gave the FTC the ability to review mergers and acquisitions before they were finalized, rather than afterward, which governed pre-legislation.
Under Biden-appointee Lina Khan, Phillips described how the FTC has done away with the process of early termination. In the past, this process made it unnecessary for every single company to provide advanced notice and advanced approval for mergers. “Historically, parties have been able to come to the agencies and say, ‘You’re not interested in this, can we just go ahead and finish our deal,’ and the agencies have said ‘yes.’”
He said this is no longer the case, and that every single merger must provide advanced notice and approval. “What we’re introducing is an inefficiency in the market for transactions that we have no interest in pursuing, just for the sake of it. I think that’s a problem,” he continued. “My concern is that it is making merger enforcement less effective, less efficient, and less fair.”
Phillips pointed to left-of-center and leftist voices in Congress, such as Rep. David Cicilline, D-New York, Sen. Elizabeth Warren, D-Massachusetts, and Rep. Alexandria Ocasio-Cortez, D-New York, who, at the outset of the pandemic, wanted to ban all acquisitions and mergers—regardless of their merit. He described this view as falling outside of mainstream perspectives, but noteworthy nonetheless.
“I don’t think that is what most people believe,” Phillips remarked. “I don’t think that is what Hart-Scott-Rodino envisions.”
This webinar took place only a couple of weeks after Phillips spoke at the Technology Policy Institute’s 2021 Aspen Forum, where he voiced similar concerns, stating that he feared that this new direction would make it more difficult for the FTC to hear cases that it should, and defended the commission’s record against critics who said it was lax under the Trump Administration.
Antitrust Experts Zero In on Big Tech and Consumer Welfare Standard at Aspen Forum
At Aspen forum, a red-hot focus on Big Tech, antitrust and consumer welfare.
ASPEN, Colorado, August 17, 2021— The Biden administration is taking a much harder line against big technology companies than was done by previous presidents, and is doing so by looking beyond the traditional consumer welfare standard of antitrust economics.
But the antitrust and competition economists making these assessments at the Technology Policy Institute conference here on Monday disagreed sharply about whether antitrust law should move beyond that consumer welfare standard.
Some these experts – including sitting Federal Trade Commissioner Noah Phillips – disagreed with stances taken by Biden’s hand-picked FTC Chairwoman Lina Khan.
Others, including Harvard Business School Professor Shane Greenstein, said that it was absolutely necessary for the FTC and the Justice Department antitrust division to investigate the gargantuan sums of money exchanged between big tech titans Google and Apple.
Speaking on a spirited panel session in the morning, “How is the U.S. Reshaping Antitrust,” Greenstein said Google pays Apple approximately $8 billion a year to make the Google search engine the default internet browser on all Apple devices.
Though this may not have historically fallen under the purview of antitrust, Greenstein was accusatory in his evaluation of the situation: “I’m sorry, no.” As to whether the antitrust division should investigate the matter, he said, “Go for it, guys.”
‘Deconcentration’ is not the goal of antitrust policy
But Carl Shapiro, professor of business strategy emeritus at University of California at Berkeley, dissented from Greenstein’s broader antitrust perspective.
“The goals of antitrust should be to promote competition—full stop,” said Shapiro. Deconcentration is not the goal of the FTC. The agency will have to determine whether it would depart from this long-held view, he said, and decide whether it would opt instead to consider concentration itself as evil.
“That’s not a version of capitalism that I want,” said Shapiro.
The primary issue is how one chooses to define competition, said Howard Shelanski, professor of law at Georgetown University. The dominant perspective has viewed competition through the lens of price effects. Other schools of thought borrow a wider aperture, considering this like privacy, wealth distribution, political power, product quality, and product variety when determining whether something improves or diminishes competition.
The more metrics that are accounted for, the more issues present themselves.
To this, FTC Commissioner Phillips responded, “If you are trying to solve everything at once, you will solve nothing at all.”
While polite, Phillips disagreed with FTC Chairwoman Lina Khan
At the beginning of the panel discussion, TPI President Emeritus Tom Lenard opened the session by asking Phillips for his impression of Khan.
Phillips responded diplomatically, joking that this question had not been on the list he had been sent. Because Khan has only been on the job for two months, it is too early for him to give a fully fleshed out appraisal of her time as chairwoman. “It’s always exciting to get new blood,” he said.
While he said he was supportive of Khan’s efforts to improve transparency by holding public meetings, he was critical of the direction in which the FTC is heading.
Proposed rule changes would create “needless friction” by delaying mergers that do not present a danger to consumers. This will make the agency less effective and less efficient.
“I worry that we are needlessly impeding our ability” to hear cases, he said.
Successes by big tech firms are ‘not a failure of antitrust’
Shapiro added that, in his view, concentration within an industry should not be viewed as a negative thing and that it is merely indicative of the fact that bigger companies are often simply more efficient and can compete more effectively in their industry. “That is not a failure of antitrust,” he said.
Shelanski said that he harbored serious reservations about expanding the consideration of antitrust. He noted that as it stands now, it is basically left to the FTC to decide how to pursue antitrust cases.
If the agency were to include considerations of value judgments, public health, environmentalism and wealth distribution, the country would need stronger democratic institutions to pursue this approach.
Former FTC Acting Chairwoman Maureen Ohlhausen, now with Baker Botts’s Antitrust and Competition Law Practice Group, shared Shelanski’s concerns about the ability of the FTC to make big, sweeping considerations on its own.
The public should not view the careful and deliberate approach to FTC decisions as lax. Indeed, she said, the commission has “done a pretty good job.”
Phillips agreed, stating that under the Trump Administration, the FTC had blocked more than 20 mergers—the most since 2001.
When asked if he felt whether antitrust guidelines should be revisited, he responded with skepticism, “There is a lot of promise of revisitation without much discussion of where [the FTC] is going.”
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