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AT&T buys Time Warner for $85 billion

Recently, AT&T bought Time Warner for $85 billion. However, they are having a hard time winning regulatory approval. Economist and political candidates are also expressing some doubt over this.

The action of AT&T buying Time Warner has opened a new market of mobility and cable TV. This corporate marriage allows the two companies to combine the technology that benefits both markets. This can turn into a possible monopoly due to the unique qualities of the combination that merges mobility and television. The monopolist will hold a strong power in the market. As a result, other companies will trying to do similar things in order to compete. However, there is also a barrier to entry because it is not easy for two giants from each market to merge like AT&T and Time Warner did. This merge will potentially hurt the consumers. Due the the gain of market power, AT&T and Time Warner can set their price higher since it does not have to take the market price.

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