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"...When the Department of Justice tried to stop the merger with Time Warner, AT&T told a judge in a May 2018 court filing that the merger "will enable the merg

"...When the Department of Justice tried to stop the merger with Time Warner, AT&T told a judge in a May 2018 court filing that the merger "will enable the merged company to reduce prices." Instead, AT&T raised prices for DirecTV Now multiple times. DirecTV Now currently offers two plans that cost $50 or $70 a month, and the service charges extra for premium networks. AT&T also raised prices for its DirecTV satellite and U-verse TV services in January while simultaneously making it more expensive for customers to cancel TV or Internet service. ..." This should be illegal. I don't mean fines, either. An executive somewhere cooked up a plan to lie to regulators, lie to shareholders, lie to their customer base, and lie to the general public. The only way to make large companies stop acting like they're above the law is to throw some millionaire executives in jail. A regular jail, none of that "bookcase in your cell" shit. Even if the plan didn't come from them. They steer the ship in times of prosperity; they sink with the ship when it goes off course and gets a hole.

noelherrick 7y ago
I don’t think jail is the solution to this or many other problems that we imprison people for on a regular basis. I understand the anger at watching someone lie and get away with it, but fines and clawbacks are a great fit for those types of crimes. We really don’t want to pay for someone to go to jail and we don’t want the possibility that they’ll become a repeat offender-which seems more likely if you remove they from family and society.
- zelon88 7y ago
  We're not talking about a stolen candy bar. Slap the perps wrist and they get the point. Executives will make a dishonest decision knowing the consequences. Then they'll make $100m off the decision, get fined $20m by Uncle Sam, get a $20m golden parachute, and then do it all over again next week. Because it made financial sense to break the law at that time. Fining a billion dollar company because an individual decided to lie is a consequence-less punishment in the same way that stealing a $1 cheeseburger from McDonalds corporate is a victimless crime.
- ergothus 7y ago
  I'm in agreement about jail, but also with the despair that causes the desire. A monetary fine would be trivial. Anything else likely wouldn't create any counter-incentive. At a minimum though I'd like to see someone convicted, nine if this settle without admitting wrongdoing. Then the next company to hire them would at least have to answer why they are hiring a convicted fraudster.
ineedasername 7y ago
Well, following the Matt Levine line of thinking, the easiest way to prosecute this would be as securities fraud. Their public facing statements misrepresented the risks to shareholders, whose stock is now worth less due to 1,000,000 lost subscriptions. Securities Fraud.
- bachmeier 7y ago
  I doubt you'd get very far with that. They lied about their plans to raise prices, but that in general is a good thing for shareholders. It's just that in this particular case they failed to understand the concept of price elasticity of demand and potentially did harm to the company.
  - shoo 7y ago
    > AT&T's total number of video subscribers dropped from 25.4 million in Q2 2108 to 22.9 million in Q2 2019. If they've hiked the prices by at least 10% in preceding years without losing many customers then they're about even terms of revenue and may be more profitable
    - ineedasername 7y ago
      Well, not quite, or not definitively. It depends on which subscribers they've lost. If the 10% lost subscribers represented higher paying (as in gold package) more profitable subscribers, meaning the 10% increase hit more lower paying customers, then they've got a net loss. In short, the 10% of lost subscribers may have accounted for more than 10% of their revenue.
  - ineedasername 7y ago
    They lied about their plans to raise prices, and raising prices has caused a problem. The lie, combined with their error in judging price elasticity, is enough to represent a material harm to shareholders who could not act with accurate information. Perhaps given knowledge of a price hike they would have sold, anticipating subscriber loss. Or maybe not. The fact is they were lied to, and denied the opportunity to act on accurate information. There's enough meat in that for an activist investors lawsuit on grounds of securities fraud. Even without a material loss, lying to investors is fertile ground for a suit.
bachmeier 7y ago
For the most part, you either stop a merger before it happens, or it's permanent. There's nothing binding the company to any claims that it will lower prices. Nobody honestly thought this merger would lower prices, not the DOJ, not anyone at AT&T or Time Warner. Note that the exact quote is "enable the merged company to reduce prices". They may not have followed that with the obvious "but the merged company plans to take advantage of its new market power to raise prices".
- mbreese 7y ago
  There could have been a consent decree (not sure if that's the right term in this context...) that in exchange for agreement to allow the merger, would have bound the company to keep prices fixed or reduced for a certain period of time. But, aside from something like that, I don't think there is much that could have been done on the regulatory side to stop the company from not following through on their claims.
SubiculumCode 7y ago
The best thing to do is to ignore their arguments and disallow more mergers...and then break up the bigger companies that make those mergers more necessary.
imglorp 7y ago
Read it carefully, from a weaselly lawyer point of view. "will enable". Yes, it enabled them to lower prices. It didn't say they would lower prices. So not really a lie. But the point is well taken - that judge could have seen past that and asked for an literal promise with actual billion dollar teeth in it if they failed to deliver.
onetimemanytime 7y ago
defense: "OK, at the time we thought we could lower prices. But as time went by and we saw that ......we changed our mind." Can't jail people over these things. Lower prices when, for how long? Never increase them?

noelherrick 7y ago

I don’t think jail is the solution to this or many other problems that we imprison people for on a regular basis. I understand the anger at watching someone lie and get away with it, but fines and clawbacks are a great fit for those types of crimes. We really don’t want to pay for someone to go to jail and we don’t want the possibility that they’ll become a repeat offender-which seems more likely if you remove they from family and society.

zelon88 7y ago
We're not talking about a stolen candy bar. Slap the perps wrist and they get the point. Executives will make a dishonest decision knowing the consequences. Then they'll make $100m off the decision, get fined $20m by Uncle Sam, get a $20m golden parachute, and then do it all over again next week. Because it made financial sense to break the law at that time. Fining a billion dollar company because an individual decided to lie is a consequence-less punishment in the same way that stealing a $1 cheeseburger from McDonalds corporate is a victimless crime.
ergothus 7y ago
I'm in agreement about jail, but also with the despair that causes the desire. A monetary fine would be trivial. Anything else likely wouldn't create any counter-incentive. At a minimum though I'd like to see someone convicted, nine if this settle without admitting wrongdoing. Then the next company to hire them would at least have to answer why they are hiring a convicted fraudster.

ineedasername 7y ago

Well, following the Matt Levine line of thinking, the easiest way to prosecute this would be as securities fraud. Their public facing statements misrepresented the risks to shareholders, whose stock is now worth less due to 1,000,000 lost subscriptions. Securities Fraud.

bachmeier 7y ago
I doubt you'd get very far with that. They lied about their plans to raise prices, but that in general is a good thing for shareholders. It's just that in this particular case they failed to understand the concept of price elasticity of demand and potentially did harm to the company.
- shoo 7y ago
  > AT&T's total number of video subscribers dropped from 25.4 million in Q2 2108 to 22.9 million in Q2 2019. If they've hiked the prices by at least 10% in preceding years without losing many customers then they're about even terms of revenue and may be more profitable
  - ineedasername 7y ago
    Well, not quite, or not definitively. It depends on which subscribers they've lost. If the 10% lost subscribers represented higher paying (as in gold package) more profitable subscribers, meaning the 10% increase hit more lower paying customers, then they've got a net loss. In short, the 10% of lost subscribers may have accounted for more than 10% of their revenue.
- ineedasername 7y ago
  They lied about their plans to raise prices, and raising prices has caused a problem. The lie, combined with their error in judging price elasticity, is enough to represent a material harm to shareholders who could not act with accurate information. Perhaps given knowledge of a price hike they would have sold, anticipating subscriber loss. Or maybe not. The fact is they were lied to, and denied the opportunity to act on accurate information. There's enough meat in that for an activist investors lawsuit on grounds of securities fraud. Even without a material loss, lying to investors is fertile ground for a suit.

bachmeier 7y ago

For the most part, you either stop a merger before it happens, or it's permanent. There's nothing binding the company to any claims that it will lower prices. Nobody honestly thought this merger would lower prices, not the DOJ, not anyone at AT&T or Time Warner. Note that the exact quote is "enable the merged company to reduce prices". They may not have followed that with the obvious "but the merged company plans to take advantage of its new market power to raise prices".

mbreese 7y ago
There could have been a consent decree (not sure if that's the right term in this context...) that in exchange for agreement to allow the merger, would have bound the company to keep prices fixed or reduced for a certain period of time. But, aside from something like that, I don't think there is much that could have been done on the regulatory side to stop the company from not following through on their claims.

SubiculumCode 7y ago

The best thing to do is to ignore their arguments and disallow more mergers...and then break up the bigger companies that make those mergers more necessary.

imglorp 7y ago

Read it carefully, from a weaselly lawyer point of view. "will enable". Yes, it enabled them to lower prices. It didn't say they would lower prices. So not really a lie. But the point is well taken - that judge could have seen past that and asked for an literal promise with actual billion dollar teeth in it if they failed to deliver.

onetimemanytime 7y ago

defense: "OK, at the time we thought we could lower prices. But as time went by and we saw that ......we changed our mind." Can't jail people over these things. Lower prices when, for how long? Never increase them?