US appeals court blesses AT&T’s $81B merger with Time Warner

US appeals court blesses AT&T’s $81B merger with Time Warner

US appeals court blesses AT&T’s $81B merger with Time Warner

It was not clear Tuesday whether the Justice Department meant to appeal the appellate court's decision.

AT&T Inc emerged victorious on Tuesday over the Trump administration's drawn-out attempts to block its $85.4 billion purchase of Time Warner as the U.S. Justice Department said it would not fight an appeals court ruling approving the deal.

"We affirm the district court's order denying a permanent injunction of the merger", the panel wrote in their released this morning."The government's objections that the district court misunderstood and misapplied economic principles and clearly erred in rejecting the quantitative model are unpersuasive".

In its ruling on Tuesday, the appeals court partially sided with the government, saying Judge Leon had "made some problematic statements, which the government identifies and this court can not ignore".

The three-judge panel on the U.S. Court of Appeals for the District of Columbia ruled unanimously in favor of the deal, setting the stage for the No. 2 U.S. wireless carrier to integrate its WarnerMedia business as well as its new Xandr advertising unit.

Four months before the justice department action, in July 2018, Trump had tweeted a meme of a WWE wrestling match with the president smacking down a figure with the CNN logo as its head.

The ruling will stand as one of the most significant losses for the justice department's antitrust division in a generation. His lawsuit against the takeover, which was meant to help AT&T stem the exodus of pay-TV subscribers, marked the first time in decades that USA antitrust enforcers had gone to trial to stop such a deal.

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The appeals court upheld a June decision by U.S. District Judge Richard Leon that the government failed to show that AT&T would be able to raise prices for Time Warner programming sold to competing cable and satellite-TV companies.

"AT&T is favoring both Time Warner and DirecTV content over its broadband services through its DirecTV Now and Watch services", she said.

"The merger of these innovative companies has already yielded significant consumer benefits, and it will continue to do so for years to come", David McAtee, AT&T's general counsel, said in a statement.

There's about a 50 percent chance of the government taking it to the high court - and scant prospects of it winning there, said Matthew Cantor, an attorney focusing on telecom antitrust matters at Constantine Cannon in NY. However, despite the fact that Judge Leon had removed any political motive by White House or the former Celebrity Apprentice host himself from the equation early on, the administration announced soon afterwards that they would challenge the ruling on appeal. When the deal was first made public in October 2016, it drew 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". "It's very hard to challenge a vertical merger".

The case could affect future antitrust regulation.

Just a day after his decision, Comcast jumped back into a bidding war with Disney for most of 21st Century Fox's TV and movie businesses. It could make the department hungrier for a win on the next big merger up for review, the pending T-Mobile-Sprint deal, one analyst says. The Justice Department and the Federal Communications Commission are still reviewing that deal, which is not a vertical merger.

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