U.S. Judge Approves AT&T's $85 Billion Merger With Time Warner

Share

The Department of Justice could decide to appeal the verdict. The government's November lawsuit was also the first major merger challenge under President Donald Trump, who railed against the tie-up when it was announced during the 2016 campaign.

Today's ruling comes as part of the antitrust lawsuit levied by the Justice Department a year ago. It is, he said then, "a deal we will not approve in my administration because it's too much concentration of power in hands of too few". It claims about 25 million of the 90 million or so US households that are pay-TV customers.

When the trial ended, Judge Leon suggested the parties consider some remedies both could deal with depending on how he ruled. Major cable, satellite and phone companies are bulking up with purchases of entertainment conglomerates to compete against rivals born on the internet, like Amazon and Google.

It also appointed a new chief executive officer earlier this month, Hans Vestberg, the company's chief technology officer, in a move that signaled Verizon would likely double down on its existing telecommunications business. Comcast is expected to try to buy much of 21st Century Fox, potentially laying the groundwork for a bidding war with Disney.

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 six-week trial featured a parade of expert witnesses as attorneys for the opposing sides took Leon on a journey through the twisty dynamics of the media and entertainment landscape.

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.

BioWare Confirms Anthem Release Date
A hallmark of BioWare games won't be making it into Anthem , as the developer confirmed there will be no romances in the game. This Indie game Sea of Solitude , which has been in development for the past three years, got a new trailer at E3.

Leon said the evidence and testimony provided by the government were faulty and that it never proved the merged entity would have increased leverage over its competitors.

Now that the merger has been given the go ahead, AT&T will add Time Warner's content to its existing paid TV subscription.

The companies' main economist, Dennis Carlton from the University of Chicago, refuted Shapiro's model as overly complicated and rejected his conclusions. 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. In fact, he suggested, consumers could end up paying less after a merger - maybe even $500 million less annually.

Leon also said it would be harmful for him to put a temporary stay on the merger while the government appeals his decision, if it does so.

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. AT&T and Time Warner say that by coming together they can create synergies of data and information that will help them make better content and sell more targeted ads, which they claim could ultimately help lower prices for consumers.

Aetna, which is about to be acquired by CVS Health in a $68 billion deal, had its shares jump 3.5 percent, to $187.00.

Share