President Donald Trump's broadsides against cable network CNN may complicate the U.S. government's legal case if it decides to block AT&T's deal to buy media company Time Warner, according to legal experts.
Trump's repeated claims that CNN produces "fake news" and other criticisms of the network could hurt legitimate legal arguments the Department of Justice may use to show the deal gives the company too much power over media rivals and is bad for consumers.
"His comments have soiled the process," said John Kwoka, an economics professor at Northeastern University. "If I were AT&T's lawyers I would certainly introduce them into the evidentiary record as meddling with what is really a law enforcement process."
The fate of AT&T's $85.4 billion deal to buy Time Warner, hatched in October 2016, looks set to end up in court as the two sides have so far failed to agree on what conditions AT&T needs to meet in order to gain antitrust approval.
Justice Department staff have recommended that AT&T sell either its DirecTV unit or Time Warner's Turner Broadcasting unit, which includes news company CNN, a government official told Reuters on Thursday, on the grounds that a combined company would raise costs for rival entertainment distributors and stifle innovation.
AT&T chief executive Randall Stephenson said on Thursday he would not sell CNN to win antitrust approval and would fight the government in court if the two sides could not reach an agreement.
"If we feel like litigation is a better outcome then we will litigate," Stephenson told the New York Times DealBook conference on Thursday. He said the company had been ready to go to court the day the deal was announced in October 2016.