Federal judge OKs AT&T-Time Warner merger
Justice Department could appeal ruling
WASHINGTON — A federal judge approved the $85 billion mega-merger of AT&T and Time Warner on Tuesday, a move that could usher in a wave of media consolidation while shaping how much consumers pay for streaming TV and movies.
U.S. District Judge Richard Leon green-lit the merger without adding major conditions. The Trump Justice Department had sued to block the $85 billion merger, arguing that it would hurt competition in cable and satellite TV, and jack up costs to consumers for streaming TV and movies.
Now, the phone and pay-TV giant will be allowed to absorb the owner of CNN, HBO, the Warner Bros. movie studio, “Game of Thrones,” coveted sports programming and other “must-see” shows. The Justice Department could decide to appeal the ruling, however.
“The impact from this decision will have wide-reaching ramifications across the telecommunications, media and tech industry for decades to come,” said GBH Insights analyst Dan Ives. “For AT&T and Time Warner, this is a major victory lap.”
The mega-merger was a highstakes bet by AT&T Inc. on combining a company that produces news and entertainment with one that funnels it to consumers. The merged company, executives said, would be better able to compete in an era in which people spend more time watching video on phones and tablets than on traditional live TV on a big screen.
Leon said the government failed to prove that the merger would lead to higher prices and other harm to consumers.
“The government … has taken its best shot to oppose this merger,” Leon said, speaking to a packed courtroom weeks after the trial. But, he added, “the government’s evidence is too thin … for this court to rely on.”
Leon rejected the notion of temporarily suspending the merger for a possible government appeal. The “drop dead” deadline for completing the merger is June 21. If it’s not wrapped up by then, either company could walk away, and AT&T would have to pay a $500 million breakup fee.
The ruling is a defeat for the Justice Department. The proposed merger was so consequential that it forced federal antitrust lawyers to reconsider legal doctrine permitting mergers of companies that don’t directly compete. First f loated in October 2016, the deal also brought fire from then-candidate Donald Trump, who promised to kill it “because it’s too much concentration of power in the hands of too few.”