Published: Wed, June 13, 2018
Business | By Pearl Harrison

Here’s why the AT&T-Time Warner merger just got approved

Here’s why the AT&T-Time Warner merger just got approved

Leon - who presided over the Justice Department's suit against Comcast's acquisition of NBCUniversal that was settled with a consent decree - signaled his time table to announce his decision on AT&T for Tuesday at 4 p.m., giving the company and the Justice Department time to settle the case. But Leon blocked discovery on certain White House communications that AT&T and Time Warner were seeking, and the companies dropped that defense, choosing to litigate the case on pure antitrust grounds.

AT&T CEO Randall Stephenson remained at company headquarters in Dallas, and he learned of the ruling when AT&T general counsel David McAtee called him, a spokesperson said.

The Justice Department had argued that AT&T's acquisition of Time Warner would allow it to charge premium prices to rivals who relied on its Turner and HBO channels to woo customers to their cable plans, potentially giving it an unfair advantage in the pay-TV market.

Ahead of the ruling, public-interest advocates had expressed deep fears that AT&T's victory would only quicken the rapid consolidation of the media, telecom and tech industries.

AT&T and Time Warner said they need to combine in order to better compete with Facebook, Amazon, Apple, Netflix and Google, companies that are already powerhouses in the content game. The ruling arrives after the Justice Department filed a lawsuit in November 2017 to try and stop the deal, which is valued at $85 billion.

The deal could still be imperiled if the Justice Department convinces a circuit court to issue a stay pending appeal. Disney has bid $52 billion for most of 21st Century Fox's assets, and today's decision my determine whether Comcast makes its own offer, which could precipitate a bidding war.


Gary Ginsberg, executive Vice President of Time Warner, said that they were happy with the decision.

Berenzweig Leonard managing partner Seth Berenzweig and Fox News contributor James Freeman on how Judge Richard Leon ruled in favor of the AT&T and Time Warner merger.

Fans have been following the Disney/Fox deal closely, as a merger between the two companies would mean Marvel Studios would reacquire the rights to the X-Men and Fantastic Four franchises, both of which have been under Fox's control for decades. Looming in the background of the deal has been Trump's long-running feud with Time Warner's CNN, which he has often derided as "failing" and a purveyor of "fake news". In a statement, Delrahim said he was "disappointed" in the ruling but stopped short of saying his division would appeal, saying only that it would "consider next steps in light of our commitment to preserving competition".

Trump, however, repeatedly had blasted the merger, due in no small part to his opposition to CNN, which is owned by Time Warner.

"AT&T/DirecTV would hinder its rivals by forcing them to pay hundreds of millions of dollars more per year for Time Warner's networks, and it would use its increased power to slow the industry's transition to new and exciting video distribution models that provide greater choice for consumers", the DOJ said in its complaint. Trump had pledged to block the deal when he was campaigning for president. AT&T did not immediately respond to a request for comment.

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