U.S. Government To Appeal Judge's Approval Of AT&T-Time Warner Deal

Muriel Colon
July 15, 2018

A mere days after the court ruling, the carrier completed its purchase of Time Warner for an estimated $85 billion.

The Justice Department is appealing a federal judge's approval last month of AT&T's $85 billion acquisition of Time Warner, a deal that was expected to usher in a wave of media and telecom mergers created to counter the growing heft and influence of Netflix, Amazon and Apple. It said it was "surprised" by the government's decision and "ready to defend the court's decision".

Judge Leon ruled, "Ultimately, I conclude that the Government has failed to meet its burden to establish that the proposed 'transaction is likely to lessen competition substantially". It's possible the court could place the case on a fast track because the longer an appeals process takes, the more integrated the two companies will become. Trump has publicly feuded with Time Warner's CNN, calling it "failing" and a purveyor of "fake news".

The Justice Department sued to stop the deal past year, saying that a distributor, AT&T, owning the likes of HBO, CNN and Warner Bros. would harm consumers by causing an increase in prices and would hurt innovation and competition.

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

Donald Trump said he opposed the deal prior to his election as USA president, while consumer groups have also voiced concerns over a concentration of power. (NYSE:TWX). The Virginia-based Virginia Retirement Et Al has invested 0.17% in Time Warner Inc.

AT&T argued that it needed that scale to compete with rivals such as Netflix and Amazon.

Some consumer advocacy groups cheered news of the appeal.

The merger could shape the way consumers stream TV and movies and how much they pay, and may usher in a new era of accelerating change and deal making in the media and telecom worlds. It will also set a precedent for companies planning to make similar deals, such as Fox and Disney.

A judge approved the deal last month after almost two years of effort by the two companies.

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