DOJ Appeals Approval of AT&T-Time Warner Deal

Daniel Fowler
July 14, 2018

Rest assured, this battle is far from over.

Judge Richard Leon ruled in AT&T's favor in June, saying in a blistering verdict that the Department of Justice did not sufficiently meet its burden of proving that the deal would allow AT&T to harm rival TV providers.

"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".

"Notice is hereby given that the United States of America, plaintiff in the above named case, hereby appeals to the United States Court of Appeals for the District of Columbia Circuit from the final judgment entered in this action on June 12, 2018", the DOJ said in its filing.

By opposing the merger, the government was forced to argue against a legal doctrine which favours vertical mergers - which is a combination between companies which do not compete directly with each other.

No matter how the Justice Department's appeal unfolds, AT&T's completed acquisition of Time Warner could prove hard to untangle.

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AT&T Chief Executive Randall Stephenson told reporters on Thursday at a conference in Sun Valley, Idaho, that the company was not surprised about the Justice Department's decision to appeal.

When the deal was first announced in October 2016, it was condemned by then-candidate Donald Trump, who promised to kill it "because it's too much concentration of power in the hands of too few".

Mr Trump has publicly feuded with Time Warner's CNN, calling it "failing" and a purveyor of "fake news". AT&T's expert witnesses claimed during the trial that merging with Time Warner would create efficiencies and allow the company to lower the prices charged to consumers. A spokesman for the Antitrust Division said that they had no comment.

The Trump administration had opposed the merger, moving to block it on grounds that it hurt media industry competition.

Among networks under Time Warner's umbrella are HBO, CNN, TNT and TBS. The day after Leon delivered his ruling, Comcast made a $65 billion offer for 21st Century Fox, in an attempt to outbid Disney for Fox's entertainment assets.

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