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Time Warner's Jeff Bewkes and AT&T's Randall Stephenson before testifying about the deal. Photo: Evan Vucci / AP

If the U.S. Justice Department were to sue over its demands that AT&T sell Turner (owner of CNN and other channels) or DirecTV in order to have its $85 billion purchase of Time Warner approved, as reported Wednesday, lawyers say the regulators will be fighting decades of precedent.

Why it matters: Speculation is swirling about the DOJ's motives, in light of President Trump's campaign trail promise to block the deal, and his vocal disdain for CNN's coverage.

Theory of the case: Critics of the proposed AT&T-Time Warner merger argue that a combination of companies in different but related markets (i.e., a vertical deal) can be as harmful as a horizontal combination of two companies that compete directly with one another.

  • Asking AT&T to sell either DirecTV or Turner could be based on the idea that owning both a major content producer (particularly in sports and news) and a nationwide video provider would enable the combined entity to push competitors around.
  • For example, AT&T+Time Warner could provide free data for customers to watch certain content (a.k.a. "zero rating"). Currently, AT&T customers using the DirecTV Now streaming service can watch most programs without eating into their monthly data allotment. Zero-rating has been one recent focus in the DOJ's evaluation of the case. A source familiar with the matter says that the agency has looked into the effect that DirecTV Now has on DirecTV's broader customer base.

Where it gets complicated: For decades, antitrust regulators have worried more about horizontal mergers than vertical ones, and courts have generally backed up that approach.

  • They'd also be bucking the status quo on another front. If antitrust enforcers have concerns about a deal, they typically ask the companies to commit to not engaging in certain actions. Asking the companies to sell off the parts of their business that could cause trouble for competitors, as the DOJ is considering, is more unusual.
  • AT&T's CEO said he doesn't plan to sell CNN and a Justice spokesperson said the agency doesn't comment on ongoing investigations.

The bottom line: The transaction is unexpectedly imperiled and may head into uncharted territory, were it to spark a lawsuit over over the right way to police competition.

Go deeper: The New York Times has a rundown of the different stories emerging from Ma Bell and DOJ.

Go deeper

2 mins ago - World

Jerusalem crisis: Hamas fires rockets, Israel begins military campaign

Palestinian protesters and an Israeli police officer near the Damascus Gate. Photo: Amir Levy/Getty Images

Days of tensions in Jerusalem escalated into an exchange of fire on Monday, as Hamas fired dozens of rockets toward Israel and the Israeli military responded with strikes of its own and said it was preparing for a military operation that could last several days.

Why it matters: This is the first time Hamas has fired rockets at Jerusalem since 2014, and the most serious escalation between the Israelis and Palestinians in many months. It comes during the most sensitive days on the calendar — the last days of Ramadan and the Jerusalem Day commemoration on Monday — and amid political crises in both countries.

Colonial Pipeline aims to be "substantially" back online by end of week

Photo: Luke Sharrett/Bloomberg via Getty Images

The FBI confirmed in a statement Monday that a professional cybercriminal group called DarkSide was responsible for a ransomware attack on the Colonial Pipeline network, which provides roughly 45% of the fuel used on the East Coast.

The latest: Colonial said in a statement at 12:25pm ET on Monday that segments of the pipeline are being brought back online in a "stepwise fashion," with the goal of "substantially restoring operational service by the end of the week."

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios