Trump Calls Out Comcast Antitrust Complaint by Cable Group
(Bloomberg) -- President Donald Trump suggested Comcast Corp. is violating antitrust laws through its ownership of NBCUniversal.
Trump on Monday promoted on Twitter a complaint by a group representing regional cable companies that Comcast, in the president’s words, "routinely violates Antitrust Laws."
The tweet followed the American Cable Association’s announcement that it had asked the Justice Department’s antitrust division to open an investigation into Comcast, the largest U.S. cable provider.
The tweet jarred investors, who sent Comcast shares to a session low. The stock fell as much as 2 percent to $37.57, the worst intraday drop in 10 days. Shares recovered to $38.09 at 3:10 p.m. in New York.
According to the cable group, the expiration of conditions on Comcast’s ownership of NBC, which were imposed by regulators as part of the cable company’s 2011 acquisition of the media company, threatens competition.
Without restrictions on its conduct, Comcast can act with "impunity," the ACA said. Comcast has the ability and incentive to harm rival cable companies by raising prices for NBC programming, according to the group. The Justice Department raised similar concerns when it unsuccessfully sued to stop AT&T Inc.’s takeover of Time Warner this year.
"When it was subject to the 2011 conditions, Comcast-NBCU at least thought twice about engaging in anticompetitive acts," ACA President Matthew Polka wrote to the Justice Department. "Without a leash, it can engage in a much wider range of bad behavior and, if it gets caught, merely use its deep pockets to play out the clock or, at worst, ask for forgiveness."
Comcast, based in Philadelphia, called the ACA’s complaint without merit. NBC has provided content to Hulu LLC and Netflix Inc., and its X1 video platform offers viewers Netflix and YouTube, the company said in a statement. Comcast is a part-owner of Hulu.
"We are competing in this dynamic environment the way we always have -- by continuing to innovate and conducting our business in compliance with antitrust laws and other legal requirements," the company said.
In August, the Justice Department’s antitrust chief, Makan Delrahim, warned Comcast that with the NBC conditions expiring, the U.S. would continue to monitor developments in how the company handles TV programming and distribution.
The Justice Department will probably open a formal investigation of Comcast, Cowen & Co. analyst Paul Gallant wrote Monday in a note.
"Announcing a formal investigation would not commit DOJ to actually taking final action, but does keep pressure on Comcast to deal reasonably with rivals," Gallant said. "It also could show the White House that Delrahim remains aware of the president’s dislike of NBC."
Polka said ACA members fear that Comcast may restrict their ability to access video-streaming service Hulu and make it available to their customers as an alternative to cable.
In his tweet, Trump also quoted Fox Business personality Charlie Gasparino as saying Comcast is “acting much worse" and has "much more potential for damage to consumers, than anything AT&T-Time Warner would do.”
Comcast’s acquisition of NBC raised antitrust concerns in 2011 because the deal united a content distributor with a content provider. The Justice Department feared that Comcast would use its control over NBC programming to harm online video rivals. It allowed the deal to go forward with conditions aimed at ensuring competitors got access to NBC content.
That was the same worry the department raised when it sued to stop AT&T’s takeover of Time Warner, a deal Trump vowed to stop when he was a candidate. Time Warner owns CNN, the news channel that Trump has repeatedly attacked for its coverage of his administration. That criticism sparked speculation that the government’s lawsuit seeking to block the deal was politically motivated. The government lost at trial and is appealing.
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