Groups Similar Search Look up By Text Browse About

Trump administration fails to block AT&T/Time Warner merger

Judge rejects DOJ case against merger, says AT&T can buy Time Warner. AT&T has won a court ruling allowing it to complete its purchase of Time Warner Inc. The ruling (PDF) by US District Judge Richard Leon went entirely in AT&T's favor. The Department of Justice had sued AT&T to block the merger, but the judge's ruling, pending a possible appeal, would let AT&T complete the purchase without spinning off any subsidiaries. The government can appeal the decision, but Judge Leon reportedly said that he would reject any government motion for a stay that would further delay the deal.  The case was held in US District Court for the District of Columbia. The government failed to prove that the merger would substantially lessen competition or that AT&T would use its ownership of premium content to harm rival TV providers, Leon wrote. "We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government's lawsuit to block our merger with Time Warner," AT&T General Counsel David McAtee said. AT&T said it intends to close the merger by June 20. It's not yet clear whether the government will appeal. " The Justice Department's antitrust chief, Makan Delrahim, said he was disappointed and will consider the government's next steps," Bloomberg reported. As the owner of Time Warner, AT&T would be able to set the price that other cable or satellite companies must pay for a large quantity of TV programming. The Federal Communications Commission under Chairman Ajit Pai allowed AT&T to skip a lengthy public-interest review. But the Department of Justice sued to block the $108 billion merger in November 2017, saying the deal is likely to raise consumers' TV bills. The DOJ argued that buying Time Warner and its stable of popular TV programming would give AT&T too much control over programming and distribution. "AT&T/DirecTV would hinder its rivals by forcing them to pay hundreds of millions of dollars more per year for Time Warner's networks, and it would use its increased power to slow the industry's transition to new and exciting video-distribution models that provide greater choice for consumers," the DOJ said in its complaint. " The proposed merger would result in fewer innovative offerings and higher bills for American families. " AT&T disputed the government's math and tried to prove that President Trump meddled in the government's merger review. Trump had pledged to block the deal when he was campaigning for president. But AT&T failed to provide any evidence suggesting that the DOJ's prosecution of the merger had "discriminatory effect and discriminatory intent," Leon said in a ruling earlier in the trial. AT&T argued that the merger will help customers without harming AT&T's business rivals and that the combined company wouldn't have enough market power to raise antitrust concerns. Customers will benefit from new bundles and offerings made possible by the merger. The combined company, AT&T argued, will "develop new ad-supported video models that shift more costs to advertisers and off consumers. " Consumer advocacy group Public Knowledge was disappointed by today's ruling. "This is a disappointing result, and we expect the government will appeal," Public Knowledge Senior Counsel John Bergmayer said. "In the meantime, not only may consumers be harmed directly by the anticompetitive harms that this merger will cause, such as higher bills and fewer choices of programming and provider, but also by the many other mergers it will encourage." US Sen. Amy Klobuchar (D-Minn.) urged the DOJ to appeal. She said: Allowing this merger to proceed raises serious concerns for consumers and the future of American media, and also sends a troubling signal to others that its open season for vertical mergers that could allow a company to raise the cost of essential products and services that its rivals need to compete, leading to higher costs for consumers and less innovation... I urge the Justice Department to take swift action to appeal this judgment to ensure that competition and consumers are protected.

Judge rules AT&T can purchase Time Warner

He reportedly put no conditions on the deal. Last November, the Department of Justice slapped an antitrust lawsuit on AT&T's proposed acquisition of Time Warner and the trial resulting from that lawsuit wrapped up last month. The DOJ has maintained that merging the two companies as is would threaten competition, but AT&T has said the deal won't produce anticompetitive effects and moreover, that the DOJ hasn't effectively demonstrated that it would. Today, US District Judge Richard Leon has issued his ruling on the suit and has declared that AT&T can buy Time Warner. This has been a long-running issue, as AT&T first announced its plans to buy Time Warner for $85.4 billion in 2016. The companies then entered into discussions with the DOJ last year and rumors surfaced that the agency had suggested some divestitures in order for AT&T to avoid an antitrust lawsuit. But those conversations didn't work out in either group's favor and the DOJ went ahead with its suit. At the time, AT&T called the move a "radical and inexplicable departure from decades of antitrust precedent." When the trial ended, Judge Leon suggested the parties consider some remedies both could deal with depending on how he ruled. The DOJ said in its post-trial brief that most if its concerns stem from the combination of Turner -- which owns CNN, TBS and TNT -- with DirecTV and therefore they should be split in one way or another. It proposed that either AT&T not get Turner in the deal or that it should divest itself of DirecTV prior to acquiring Time Warner. AT&T wasn't on board, saying, "Divestitures here would destroy the very consumer value this merger is designed to unlock." AT&T CEO Randall Stephenson also said last year, "You shouldn't expect that we would sell something larger [than CNN] to get the deal done. It's illogical. It's why we did the deal." Judge Leon reportedly put no conditions on the deal and the result of this case stands to have far-reaching effects on the media landscape and other groups considering or seeking vertical mergers. Most immediately, Disney's bid to buy a chunk of 21st Century Fox may be impacted as the ruling could encourage Comcast to put forward a competing bid, as it has already announced it might do. Other deals on the line include the proposed T-Mobile and Sprint merger, CVS' purchase of Aetna and Cigna's acquisition of Express Scripts. JUST IN: Statement from U.S. Assistant Attorney General on AT&T/Time Warner decision. In response to the ruling, US Assistant Attorney General Makan Delrahim said, "We are disappointed with the court's decision today. We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner." He added that the DOJ would consider its next steps, which could include an appeal. "We are pleased that, after conducting a full and fair trial of the merits, the court has categorically rejected the government's lawsuit to block our merger with Time Warner," AT&T's general counsel David McAtee said in a statement. The company will now work to complete the merger by June 20th.