ibusinesslines.com
ibusinesslines.com August 19, 2018


Judge rules AT&T can purchase Time Warner

13 June 2018, 01:36 | Kelvin Horton

AT&T-Time Warner Decision: Either Way, Media Is Ailing

Comcast readying new bid for 20th Century Fox film and TV assets

Judge Richard Leon of the US District Court for the District of Columbia said at a hearing that he has found, after a six-week trial, that the deal does not violate antitrust law and can proceed.

"This decision from Judge Leon will have broad ramifications for the tech, telecommunications and media sector for decades to come", Daniel Ives, the chief strategy officer at GBH Insights, told Business Insider in an email before the decision was handed down.

A federal judge on Tuesday gave his blessing to telecom giant AT&T's drive to take over the Time Warner media conglomerate.

The Justice Department, which may still appeal the decision, sued the companies in November, arguing that the tie-up could be used to suppress competition and raise prices for consumers.

Even so, the case brought previous year by the antitrust lawyers at Trump's Justice Department to block the AT&T and Time Warner marriage is an outlier.

The judge said 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. That's not to say that vertical mergers get through regulatory approval free and clear - the FTC has fought 22 vertical mergers since 2000 - but they receive less scrutiny than horizontal mergers.

Because of AT&T's ownership of DirecTV, it can drive a harder bargain with other distributors that want Time Warner content, the government's lawyers argued during the trial. The "drop dead" deadline for completing the merger is June 21.


Some critics of President Trump have questioned whether the case was brought as political payback against Time Warner's CNN for unfavorable coverage of President Trump, who often called the cable news channel "fake news".

The ruling is a stinging defeat for the Justice Department. Comcast, which had earlier bid for the Fox assets but lost out to Disney, is expected to renew its pursuit now that AT&T has won.

It's unclear at the present time if Fox will stick with the Disney deal or start a potential bidding war.

It's also worth noting that President Trump has been publicly opposed to the deal since he was on the campaign trail. Announced in October 2016, it was seized on by then presidential candidate Donald Trump as the sort pf deal his administration would block.

The government argued that AT&T would gain outsize market power, jacking up the prices it charges cable providers to carry networks in the Time Warner stable. The government's star witness was Carl Shapiro, an economist at the University of California, who used an economic model to predict that consumer cable bills could rise by $500 million annually in aggregate by 2021.

"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", David McAtee, AT&T's general counsel said in a statement. He rejected the government's argument that it would hurt competition in pay TV and cost consumers hundreds of millions of dollars more to stream TV and movies.



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