AT&T Wins in Court to Merge With Time Warner

13 June, 2018, 03:30 | Author: Salvatore Jensen
  • AT&T Wins in Court to Merge With Time Warner

For its part, AT&T was cheering the decision. The company will now work to complete the merger by June 20th.

A federal judge has approved AT&T's merger with Time Warner, a massive media deal opposed by the government that will shape how much consumers pay for streaming TV and movies. His 172-page decision delivered a stinging defeat to Trump administration's Justice Department while opening the door for Comcast Corp.to bid for parts of 21st Century Fox and become an worldwide company. But if the ruling falls in the Justice Department's favor, a new era of government scrutiny over these types of mergers could freeze further consolidation in the industry.

Judge Richard Leon said the U.S. government failed to meet the burden of proof that the tie up between the largest USA pay TV operator and media entertainment giant Time Warner would harm competition.

It's not clear whether the DoJ will appeal today's decision or seek an injunction, but if so, it could tie up the merger in courts for months and complicate the merger's outcome.

Using unusually strong language, Leon said it would be "manifestly unjust" for the government to ask him to put his own ruling on hold, because if he were to do so, it could have the effect of killing the deal, which has a deadline for completion of June 21.

Waiting in the wings are potential big-billions deals involving 21st Century Fox and Disney, Verizon and CBS, T-Mobile and Sprint.

The mega-merger was a high-stakes bet by AT&T Inc. on combining a company that produces news and entertainment with one that funnels it to consumers.

AT&T Wins in Court to Merge With Time Warner

In the lawsuit brought forward by the Department of Justice, Judge Richard Leon sided against the government's claims that the $85.4-billion deal between the two companies would violate antitrust laws and unfairly lead to higher prices for consumers.

At the heart of the DOJ's complaint is an assumption that the merged entity would use its market power to raise the price of content now owned by Time Warner, or threaten to withhold programming, including hit shows such as Game of Thrones and NCAA March Madness. "For AT&T and Time Warner, this is a major victory lap". Online companies like Amazon, Google and Netflix have emerged as alternatives to the cable industry both distributing and creating their own content.

For the past six weeks, AT&T has been in court over concern of its want to purchase Time Warner for a total of $85 billion.

Amid the shifting media sands is a backdrop of intense competition in the wireless business. The merged companies could withhold programming from competitors, pressuring consumers to switch to AT&T services.

Bloomberg via Getty Images AT&T CEO and Chairman Randall Stephenson exits federal court in April.

"AT&T is buying Time Warner, and thus CNN", Trump told an audience at a campaign stop in Gettysburg, calling the proposed merger an example of a media "power structure" that was working to suppress his vote and the voices of his supporters.

As a candidate for president, Trump vowed to block the merger, stating it would concentrate too much power in one company. The Justice Department could decide to appeal the ruling, however. Sessions did not comply with the request.




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