Justice Dept. will appeal approved merger of AT&T, Time Warner

Justice Dept. will appeal approved merger of AT&T, Time Warner

By Gary Gately   
Published
Time Warner Center in Manhattan (Photo: Rockybiggs at en.wikipedia)

WASHINGTON — The Trump administration will ask a federal appeals court to block an $85.4 billion mega-merger between AT&T and Time Warner.

The Justice Department on Thursday filed a notice of intent to appeal to the U.S. Circuit Court of Appeals in Washington, to challenge a federal judge’s approval of the merger a month ago in perhaps the biggest antitrust case in decades.

The Justice Department’s Antitrust Division had sued to stop the deal, arguing it would reduce competition in pay TV in violation of federal antitrust law and force consumers to pay more to stream TV and movies.

But U.S. District Court Judge Richard Leon ruled on June 12 that the government had failed to prove that the merger is likely to result in a substantial lessening of competition.

Leon placed no conditions on the merger, enabling AT&T, the phone and pay-TV giant, to absorb Time Warner, the sprawling media empire that owns CNN, HBO, Warner Bros. movies and numerous popular TV programs.

The government’s decision to appeal to try to block the murder surprised AT&T, said the company’s general counsel, David McAfee.

Speaking of Leon’s approval of the merger last month, McAfee said in a statement: “The Court’s decision could hardly have been more thorough, fact-based, and well-reasoned. While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DOJ has chosen to do so under these circumstances. We are ready to defend the Court’s decision at the D.C. Circuit Court of Appeals.”

Leon’s decision had been widely construed as a green light for other “vertical” mergers, between companies in different industries. But the federal government’s appeal appears to continue a more aggressive approach to antitrust enforcement in the first federal government challenge to a vertical merger since the 1970s..

Industry watchers have been intensely focused on the case, which comes at a time when such vertical mergers have become increasingly popular  Verizon’s purchase of AOL and Yahoo, Amazon’s acquisition of Whole Foods, to name a few. Also, Comcast and Disney are battling it out for control of 21st Century Fox.

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