WASHINGTON – The Justice Department's new antitrust chief, Makan Delrahim, needed just seven weeks to land himself in the middle of the biggest antitrust case in 20 years.
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Mr. Delrahim, confirmed by the Senate Sept. 27, made the decision to file the government lawsuit Monday challenging AT&T Inc.'s planned acquisition of Time Warner Inc. The antitrust division he leads alleged that the vertical combination of AT&T's video distribution with Time Warner's popular cable programming would give the merged firm the power to raise prices and hinder competitors and innovation.
AT&T criticized the government's arguments as unreasonable and inconsistent with past practice, which has focused primarily on horizontal mergers between direct competitors. It called President Donald Trump's repeated criticisms of Time Warner's CNN the "elephant in the room" in the Justice Department's case, raising questions about political influence. The department said the White House had no role in the decision to sue.
The dispute has set the stage for a major court battle in Washington, the highest-profile antitrust case since the Justice Department sued Microsoft in 1998 on allegations of unlawful monopolization. Microsoft Corp. avoided a breakup of its business but agreed to restrictions on its business conduct.
AT&T Chief Executive Randall Stephenson said the new lawsuit threw the business world into a state of uncertainty about what types of deals and investment are permissible.
Mr. Delrahim, reached by phone, declined to comment on the specifics of the case. But asked about Mr. Stephenson's comment that the lawsuit renders companies unable to know what activity they can engage in, Mr. Delrahim offered a one-word response: "Compete."
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Mr. Delrahim, 48 years old, and his family immigrated to the U.S. when he was 9, at the time of the Iranian revolution. He spoke no English when he arrived. He spent his teenage years in California and graduated from the University of California, Los Angeles, and got his legal degree from the George Washington University Law School.
He developed an interest in patent and antitrust law, as well as an interest in Republican politics.
He spent five years as a staffer to Sen. Orrin Hatch (R., Utah) on the Senate Judiciary Committee, working among other things on legislation that updated the federal law governing what transactions must be submitted for government antitrust review.
Mr. Delrahim moved to the Justice Department's antitrust division from 2003 to 2005, during the George W. Bush administration. During that stint as a department lawyer, he led an investigation into complaints of alleged anticompetitive practices at Clear Channel Communications' radio and concert businesses. The department later closed the probe after the company spun off its concert arm into the separate Live Nation entity.
Separately, Mr. Delrahim served on a bipartisan commission created by Congress to study the modernization of antitrust laws. He spent more than a decade in private practice after his first job at the Justice Department.
Mr. Delrahim in an opinion article last year said Mr. Trump wasn't his first GOP choice for the White House, but he urged Republicans to support Mr. Trump's candidacy, arguing the direction of the Supreme Court was too important to leave to Democrat Hillary Clinton.
After Mr. Trump won the presidential election, Mr. Delrahim joined the White House as a deputy counsel, where he was a key figure in the administration's high court nomination of Neil Gorsuch. Around the time Justice Gorsuch was confirmed in April, the president nominated Mr. Delrahim for the Justice Department antitrust post. The Senate confirmed him on a 73-21 vote.
Some Democrats, most prominently Sen. Elizabeth Warren (D., Mass.), argued Mr. Delrahim would be too friendly to corporations, but others offered their support, believing he would bring cases. That prediction quickly has proven correct.
"I always found him to be an energetic and creative guy. He wasn't there just to warm a seat," said Washington antitrust lawyer Seth Bloom, a former Democratic staffer on the Senate Judiciary Committee who worked with Mr. Delrahim.
Other people under consideration by the Trump administration for the antitrust post included Joshua Wright, a vocal conservative on antitrust matters and former member of the Federal Trade Commission.
Mr. Wright, now a professor at George Mason University and a private practice lawyer, on Tuesday said he wasn't a fan of the AT&T suit, saying it lacked "a sound theoretical foundation and economic evidence" and was unlikely to prevail in court.
President Trump's continued criticisms of CNN, and his pledge as a presidential candidate to block the AT&T-Time Warner deal, are sure to hang over the case.
AT&T had previously avoided the CNN issue. As late as Nov. 9, Mr. Stephenson said he had "no reason to believe" that Mr. Trump's dislike of CNN had affected the Justice Department's work. That tone changed after the lawsuit Monday, when Mr. Stephenson explicitly raised the question of whether the Justice Department's challenge was "all about CNN."
The company also is highlighting a television interview Mr. Delrahim gave last year as a private practice lawyer in which he said the transaction didn't appear to raise major antitrust concerns. In the same interview, Mr. Delrahim said the deal could raise "some concerns and antitrust issues of one distributor owning various content, and it might somehow impact other distributors."
Mr. Delrahim's defenders have said his television remarks were the kind of armchair analysis lawyers frequently provide to reporters after merger announcements, before a factual record has been developed by a government investigation.
The new antitrust chief has said repeatedly that his decision making wasn't influenced by the White House.
"I can't get any more clear than that," Mr. Delrahim said at a Nov. 10 public appearance in California. Some people may try to inject politics into an antitrust review, he said, but "I've got to keep my nose down, be a law enforcer, do what's good [for] the American people."
--Drew FitzGerald contributed to this article.
Write to Brent Kendall at firstname.lastname@example.org
(END) Dow Jones Newswires
November 21, 2017 14:53 ET (19:53 GMT)