Saturday, 23 June, 2018

Court Approves AT&T’s Merger With Time Warner

AFP  Getty Images AFP Getty Images
Charles Bowen | 13 June, 2018, 23:04

The Justice Department even sued to block it, but Judge Leon saw things a bit differently.

Comcast is planning to offer a $60 billion all-cash offer, which would top Disney's $52.4 billion all-stock offer for a majority of 21st Century Fox. With AT&T's victory over the DOJ, it seems likely that Comcast will put together its bid for Fox quickly. Online companies like Amazon, Google and Netflix have emerged as alternatives to the cable industry both distributing and creating their own content.

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.

A Comcast had no comment on Tuesday night.

Notably, the ruling does not require AT&T to divest any assets of Time Warner to complete the transaction.

The AT&T logo on a retail store. However, now that the AT&T deal has been approved by a federal judge, there is precedent for such a deal and Comcast believes it won't be blocked.

AT&T and Time Warner are not competitors; theirs would be a "vertical integration" of complementary companies: Time Warner makes the TV shows (and movies and news programming and so forth), while AT&T offers the satellite and cable TV services and mobile phone systems on which people consume such content.

The Justice Department charged that AT&T was buying Time Warner so the carrier could charge its competitors more to carry CNN, HBO and National Basketball Association games on TNT, or maybe even cut them off altogether to make its own distribution services more popular.

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"Consumers may not notice the difference if this one deal goes through because they are already getting crushed in the marketplace", added Susan Crawford, a professor at Harvard Law School and author of Captive Audience on the Comcast/NBCUniversal merger.

"Compare today to the 50s or 60s when we had three television stations and you had one AT&T that was, then, protected by government monopoly", Crews said. The Justice Department "did a good job just focusing on this merger. and how it would be abusive, not just how bad".

AT&T argued that its proposed acquisition of Time Warner is a defensive move against the increasing threat of internet TV services like Netflix, Amazon, and YouTube.

The decision amounts to a stunning loss for Delrahim, President Donald Trump's chief antitrust regulator.

"We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government's lawsuit to block our merger with Time Warner", AT&T General Counsel David McAtee said.

While the motive behind the challenge to AT&T's deal may never be known, Blair said politicizing the process would be "extremely unsafe for the country".

It's also worth noting that President Trump has been publicly opposed to the deal since he was on the campaign trail.

"Everything's on the line now for the Department of Justice", Gene Kimmelman, a former DOJ antitrust official who now runs a consumer advocacy group, told the Washington Post.

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