WASHINGTON (AP) – A federal court appeal on Tuesday removed AT & T's takeover of Time Warner, and rejected the Trump administration's allegations that $ 81 billion would harm consumers and reduce competition in the television industry.
The US government Court of Appeals in Washington came in the high-stakes competition case, approving one of the largest media marriage ever. It was already completed in the spring, shortly after a federal test judgment approved it. AT & T, a wireless operator and TV and home internet provider, absorbed Time Warner, the owner of CNN, HBO, the movie studio Warner Bros., "Game of Thrones", sports programming and other performances.
Many observers had anticipated that the ruling favorable to AT&T from three judges appeals to the court panel. The decision was unanimous to maintain the June judgment of the trial. Opposing the merger forced the Ministry of Justice to argue for standing legal doctrine that favors mergers between companies that do not compete directly with each other, so-called vertical merger.
The American antitrust court against Dallas-based AT&T marked the first time for decades that the government has challenged this doctrine by suing to block a vertical merger.
The Judges of the Court of Appeal said that US District Judge Richard Leon was correct to reject the government's argument that AT & T's acquisition of Time Warner would harm competition, restricting elections
"The government failed to meet the burden of proof" of its theory that the cost of Time Warner's Turner Broadcasting content would increase after the merger, mainly through threats of "blackouts" programming, Judges say. Turner networks include CNN.
The antitrust professors of the Ministry of Justice had argued that Leon misunderstood the complexity of the television industry and the nature of AT & T's competitors.
The idea behind the merger was to help AT & T ̵
AT & T already had a streaming service, DirecTV Now, but launched a cheaper offer called WatchTV shortly after the deal was closed. Another streaming service, "WarnerMedia", is scheduled for later this year.
"The merger of these innovative companies has already provided significant benefits for consumers, and it will continue to do so in the years to come," AT & T General Counsel David McAtee said in a statement. "While respecting the important role that the US Department of Justice plays in the merger review process, we trust that today's (decision) will end this trial."
The issue dealt with a major setback to the Trump Justice Department. If the government decided to appeal the decision, the next step would probably be the Supreme Court, and it was not clear if Justis had planned to do so.
There is about 50 percent chance that the government will take it to college – and get opportunities to win there, says Matthew Cantor, a lawyer focusing on telecommunications antitrust links at Constantine Cannon in New York.
The Ministry of Justice seems to pursue the long shot against the merger, rather than assessing the circumstances It could have been imposed on the AT&T of the trial to make the deal more acceptable. The Registrar's departmental director, Makan Delrahim, does not like mergers that require the regulators to keep an eye on the overall company's behavior for many years to come.
But politics and presidential influence can also be a factor that Cantor suggested. When the deal was first published in October 2016, it broke off when the candidate Donald Trump, who promised to kill it "because there is too much concentration of power in the hands of too few." Trump as president publicly celebrated with Time Warner is CNN, calling it "failing" and a "false news" provider and suspending one of its White House correspondents.
"It seems that political considerations have been involved in this," Cantor said. "It is strange that the Ministry of Justice has gone after this merger as its main merger case. … This was a very tough case. It is very difficult to challenge a vertical merger."
The case may affect future antitrust regulation. It underlines that the government should look at vertical mergers more critically, especially when companies are already combining in industries that have few competitors, said Diana Moss, president of the American Antitrust Institute.
There has been a rush of agreement in the cable, entertainment and telecom industry in recent years, and Leon's government opened the doors for more effort.
Just a day after his decision, Comcast jumped back to a bidding war with Disney for most of the 21st Century Fox TV and film business. Disney eventually won, and Comcast bought British Broadcaster Sky instead.
In other contractual activity, wireless operators attempt to combine Sprint and T-Mobile. The Ministry of Justice and the Federal Communications Commission are still considering the agreement, which is not a vertical merger. Sprint and T-Mobile are direct competitors.
Arbel reported from New York.