The US government’s argument that AT&T’s $80bn takeover of Time Warner would harm competition has been rejected in the US District Court for the District of Columbia. Judge Richard Leon sided with the two corporate giants in what was the first major antitrust litigation against a vertical merger in decades.
The proposed deal can go ahead without any conditions. Justice Leon found fault with the US Department of Justice’s economic analysis suggesting likely to harm consumers, as well as other evidence supporting those claims. Justice Leon said the parties had waged ‘an epic battle in a six-week trial, and warned in his conclusion that it would be unjust for the government to seek a stay of the ruling pending an appeal because it would have the effect of preventing the merger before a June 21 ‘break-up date. Failure to consummate the merger by that date would also require AT&T to pay a $500 million break-up fee. He opined, ‘In this court’s judgment, a stay pending appeal would be a manifestly unjust outcome in this case,’ adding “I hope and trust that the government will have the good judgment, wisdom and courage to avoid such a manifest injustice.”
DoJ mulls appeal
President Donald J. Trump had pledged to stop the merger during his 2016 presidential campaign, and is a vocal critic of Time Warner-owned CNN over its coverage of his administration. The Justice Department’s antitrust suit highlighted that AT&T’s DirecTV is the nation’s largest distributor of traditional subscription television, and aprt from CNN Time Warner owns many top networks, including TNT, TBS and HBO. The Justice Department’s antitrust chief, Makan Delrahim, had suggested before filing suit that the companies sell their stake in either DirecTV or Turner Broadcasting, but the companies didn’t agree. The deal, which could close next week, is likely to setting off a wave of corporate mergers in America. Leving the court, Mr Delrahim, said he would read the judge’s opinion before making a decision on an appeal.