Published: Wed, June 13, 2018
Markets | By Josh Butler

AT&T and Time Warner win legal battle, confirming the merger

AT&T and Time Warner win legal battle, confirming the merger

In making that ruling, Leon reaffirmed the judiciary's traditional tolerance for "vertical integration" - the technical term for mergers between companies that operate related, but distinct, businesses. It's unusual for the Justice Department to argue that a vertical merger of two companies that aren't direct competitors would limit competition, but the effect that the merger will have on the telecoms and entertainment industry is significant.

Time Warner owns CNN, HBO, Warner Bros. The companies' CEOs, AT&T's Randall Stephenson and Jeffrey Bewkes of Time Warner Inc., testified in support of the deal.

AT&T would use its leverage over the must-have shows, in particular HBO's Game of Thrones or National Basketball Association games on TNT, to charge Comcast or Verizon more than it would charge itself for distributing Time Warner channels, giving itself a competitive advantage, the government claimed. An appeal could force the date to be moved back again, perhaps with new demands placed on AT&T by impatient Time Warner shareholders.

Leon has ruled in favor of AT&T in the government's antitrust suit to block AT&T's proposed merger with Time Warner .

Months before Trump nominated him to the Justice Department's leading antitrust position in 2017, Delrahim even had expressed an openness to the combination of AT&T and Time Warner, predicting in an interview on Canadian television that it might not trigger any regulatory concerns. AT&T pushed to merge with Time Warner to better compete with these newer companies and claim back some of the market.

AT&T has argued that a merger consolidating control over both sides of content operations would enable it to collect valuable customer data, which it could then use to sell high-priced targeted advertising.

How Neymar Reacted To Fred Joining Manchester United
Creator of Atletico-MG and revealed at the base of the worldwide , the midfielder played the last five seasons in Ukraine. United are in need of midfield reinforcements with Michael Carrick retiring and Marouane Fellaini out of contract.

Corporate America had closely watched the case and the decision is likely to lead to more mergers.

Shares in entertainment companies and potential targets of new deals because of Leon's decision rose sharply - CBS shot up about 5 percent and Fox jumped 7 percent in after-market trading on hopes of a bidding war for it between Comcast and Disney.

The decision by Judge Richard Leon is a setback for Makan Delrahim, President Trump appointee to the top spot in the Justice Department's antitrust division, challenging his view of antitrust laws in the digital era.

Although AT&T does not have to go through with the merger and Time Warner does not have to accept, with federal approval the $85.4 billion deal is now virtually complete. "We look forward to closing the merger on or before June 20", a day before the contractual deadline with Time Warner, said David McAtee, AT&T general counsel. Therefore, AT&T would likely increase the rates that other content distributors must pay to air Time Warner content - forcing its rivals to either raise prices on their subscribers (which would inspire some consumers to switch to DirectTV), or else accept lower profit margins (which would impair their ability to compete with AT&T in the long term). "I urge the Justice Department to take swift action to appeal this judgment to ensure that competition and consumers are protected".

President Donald Trump, who has advocated for the blocking of the deal, has criticized CNN for its coverage of his election campaign and his administration.

Like this: