The politicization of the Department of Justice will hurt all US businesses. UU., Not only to AT & T and Time Warner.


In the last year, our precious democratic institutions have been stressed to the point of rupture. Every day we hear about new threats to what we consider sacrosanct, and many of those threats come from the White House. President Donald Trump has shown again and again that he is happy to use the various government departments to benefit himself and his friends and to attack his enemies, whether he dismantles the EPA from within or encourages the community of intelligence to investigate conspiracy theories. Hillary Clinton.

So far, the business world has been inoculated with this madness. Until recently, the stock market was constantly rising while unemployment was falling. Anticipating tax reform and increasing deregulation, companies have merged at a faster rate than in the first year of any other modern presidency. US mergers and acquisitions UU They have added $ 1.2 trillion since Trump was elected.

But Trump's latest move could finally curb that prosperity. The Department of Justice is suing to stop the merger between AT & T and Time Warner. There are even reports that the Department of Justice has turned to state attorneys general to encourage them to block the $ 85.4 million merger.

But media watchers question the reasoning behind the lawsuit. At first glance, the merger should not inspire the kind of backsliding that we are seeing from the Department of Justice. This is what is known as vertical merger, which means that these are companies that currently do not compete, so it does not reduce competition. The DOJ almost never blocks this type of mergers.

Instead, it seems to have everything to do with the ownership of Time Warner on CNN.

Trump has tweeted his displeasure with the news network, which he considers too critical of his administration, again and again and again . There are reports that the government is willing to reach an agreement with AT & T about the case, if the company sells CNN.

This news should send chills to all Americans. It means that the president is willing to interfere in a business only to punish his perceived enemies. Leaving aside for a moment the potentially chilling effect it could have on freedom of expression, given that media companies seeking to merge can think twice before giving their reporters free rein to report on the Trump administration, it could also have a cooling effect on economic growth. 19659009] The White House's heavy-handed tactics will make many business leaders think twice before doing any kind of mergers and acquisitions activity that could attract the attention of the government.

Entrepreneurs (especially technology entrepreneurs) at all levels rely on outputs. Entrepreneurs should know that they will eventually be able to sell their business or go public. And entrepreneurs need to know that they can buy smaller businesses to expand their current offerings or grow in new directions.

These types of White House hard-line tactics, which come after the merger, have been under review for more than a year – will make many business leaders think twice before doing any kind of merger activity and acquisitions that can attract government attention. Trump is unpredictable. Nobody knows which company can turn their angry gaze. And the mergers and acquisitions process is expensive and complicated. There is no doubt that many executives will choose to postpone, or even finalize, the mergers and acquisitions plans due to the increasing level of uncertainty.

The situation could even cause problems for companies that are clearly friends with Trump. Rupert Murdoch, who has been a strong ally of Trump, would like to sell his Century 21 studio st . If you sell to a company like Disney, there will definitely be antitrust concerns. How can the administration approve this type of merger if they are trying to stop a vertical merger less worrying as the deal with AT & T Time Warner?

This kind of fear eventually slows the current United States. economic growth. Entrepreneurs do their best work when they know exactly what the field of play is like. They know the rules and they know how to work within the system to grow their businesses. The current focus of management is similar to throwing the rule book in the trash and replacing it with a despot who needs to be placated and pampered at every step. That does not create an environment that encourages entrepreneurship.

The president loves to brag about the economic growth that has already taken place under his supervision. If he wants it to continue, he needs to rethink his approach to this merger. Send a clear message to companies that the only offers that can be made are those that Trump likes is a losing idea. As Trump himself could say: Sad!

Mike Montgomery is the executive director of CALinnovates a technology advocacy organization. Disclosure: AT & T is a member of CALinnovates. Alcánzalos @CALinnovates .

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