Federal judge approves AT&T merger with Time Warner

Govt argues that AT&T-Time Warner deal would hurt consumers

Federal Judge to Decide if AT&T Can Buy Time Warner The Associated Press 11 Jun 2018

The ruling by Judge Richard Leon bit.ly/2Jxx6qE of the U.S. District Court for the District of Columbia brings an end to a six-week antitrust trial in which U.S. regulators argued that the $85 billion deal would give AT&T undue leverage against rival cable providers that relied on Time Warner's content.

"We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner", he said in a statement.

The decision by the Justice Department to sue to block the merger caught AT&T and many others in the media industry by surprise.

Leon said the government's case fell short on all counts and warned against seeking to delay the deal with an appeal saying that would cause irreparable harm to the companies.

Leon said the government had "taken its best shot" to oppose the merger. "I think you'll see a lot of people using it as an opportunity to push mergers they may have been thinking about", said Ed Black, president of the Computers and Communications Industry Association, a trade group in Washington that represents companies like Amazon, Facebook and Google. The companies then entered into discussions with the DOJ a year ago and rumors surfaced that the agency had suggested some divestitures in order for AT&T to avoid an antitrust lawsuit. Comcast is expected to try to buy much of 21st Century Fox, potentially laying the groundwork for a bidding war with Disney. The company will now work to complete the merger by June 20th. Ultimately, the government argued this would harm competition and innovation as well as raise prices for consumers. Other acquisitions on the table include Disney's offer to buy 21st Century Fox, drug store CVS's bid for Aetna and T-Mobile's potential merger with Sprint. In order for them to compete against these giants, Time Warner needs AT&T's distribution network of broadband and wireless customers. It's unusual for the Justice Department to argue that a vertical merger of two companies that aren't direct competitors would limit competition, but the effect that the merger will have on the telecoms and entertainment industry is significant.

As a candidate for president, Trump vowed to block the merger, stating it would concentrate too much power in one company.

The mega-merger is a high-stakes bet by AT&T Inc. on the synergy between companies that produce news and entertainment and those that funnel it to consumers - who spend more time watching video on phones and tablets and less time on traditional live TV on a big screen.

It also appointed a new chief executive officer earlier this month, Hans Vestberg, the company's chief technology officer, in a move that signaled Verizon would likely double down on its existing telecommunications business. AT&T CEO Randall Stephenson also said a year ago, "You shouldn't expect that we would sell something larger [than CNN] to get the deal done".

The decision comes despite criticism from Trump, a frequent detractor of Time Warner's CNN and its coverage.

The judge rejected the government's argument that the merger would hurt competition in pay TV and cost consumers hundreds of millions of dollars more to stream TV and movies.

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