AT&T, Time Warner Merger Cleared

AT&T, Time Warner Merger Cleared

AT&T, Time Warner Merger Cleared

U.S. District Judge Richard Leon announced his decision in a packed courtroom, ruling that antitrust enforcers at the Justice Department had not proven their case against the merger...

Speaking after the ruling, AT&T's chief lawyer, Daniel Petrocelli, sidestepped many questions about potential political interference. The combined company would have a library that includes HBO's hit Game of Thrones and channels like CNN, along with vast distribution reach through wireless and satellite television services across the country.

For this reason, the government was hoping that Leon would at least put conditions on the merger, like requiring the telecom to sell off some of Time Warner's most coveted properties.

AT&T, Time Warner Merger Cleared
AT&T, Time Warner Merger Cleared

AT&T said it intends to close the merger by June 20.

Levine/NewscomAn ill-advised effort by the Department of Justice to stop AT&T from buying out Time Warner for more than $85 billion was rejected by a federal judge today. In addition, T-Mobile and Sprint are direct competitors, so their merger is perhaps more likely to be seen as anti-competitive than a union of AT&T and Time Warner.

Regulators will still likely scrutinize similar deals, and there is no guarantee that the district court's approval of AT&T's merger with Time Warner means that other major media acquisitions would be approved, several antitrust attorneys told Reuters.

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AT&T said that controlling Time Warner's cable brands will help it craft new types of content to retain its customers as web-based rivals like Netflix Inc woo audiences away from traditional pay-TV subscriptions.

The DOJ has argued that this type of consolidation would give the merged AT&T-Time Warner the ability to raise prices, thwarting the competition's ability to compete by forcing them to raise prices to maintain carriage rights.

The decision is a huge loss for the Justice Department, which broke from recent tradition by challenging the vertical merger, which involves two companies that don't compete directly with each other.

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"This will be a blockbuster summer for media mergers", said Mary Ann Halford, senior adviser to OC&C Strategy Consultants. Time Warner could already make such threats, but the DOJ claims it would have greater incentive because it could benefit from some subscribers switching over to AT&T's networks (DirecTV, U-verse and DirecTV Now). It would also be the 12th largest deal in any sector, the data showed. The Justice Department "did a good job just focusing on this merger. and how it would be abusive, not just how bad". During Donald Trump's campaign for President in 2016, he said he would block the deal as President "because it's too much concentration of power in the hands of too few".

The Justice Department rarely sues to block a "vertical merger" such as the AT&T and Time Warner because they are not considered as economically unsafe as "horizontal mergers" - or ones in which a companies buys direct competitors such as T-Mobile's pending deal for Sprint.

Initially AT&T and Time Warner planned to use a "selective enforcement" defense, alleging that the administration was blocking the deal because of Trump's dislike of CNN.

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