The U.S. Department of Justice (DOJ) will appeal a court ruling approving the AT&T-Time Warner merger. It is again expected to argue the $84.5 billion mergers will make the pay-TV market "less competitive and less innovative."
AT&T, the second largest wireless carrier in the U.S., was surprised by the appeal, said General Counsel David McAtee. "The Court's decision could hardly have been more thorough, fact-based, and well-reasoned. While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DOJ has chosen to do so under these circumstances," said McAtee. "We are ready to defend the Court's decision at the D.C. Circuit Court of Appeals."
In June, U.S. District Judge Richard Leon ruled in a nearly 200-page opinion that the deal is legal and imposed no conditions on the merger. He brushed aside arguments by the DOJ and ruled entirely in AT&T's favor. Leon's ruling will allow AT&T complete the purchase without spinning off any subsidiaries.
"The Government has failed to meet its burden of proof to show that the merger is likely to result in a substantial lessening of competition," Leon wrote.
Leon said the government failed to prove the merger will substantially lessen competition or that AT&T will use its ownership of premium content to harm rival TV providers. The government can appeal the decision, but Leon said he'd reject any government motion for a stay that will again delay the deal.
DOJ sued to block the merger in November 2017. AT&T and Time Warner announced their proposed merger in October 2016. Since then, AT&T has argued that buying Time Warner will help it compete against tech companies like Amazon and Netflix. AT&T said the deal will also help attract customers by bundling entertainment with mobile services.
AT&T also claims the merger will help customers without harming AT&T's business rivals. It argues that the combined company won't have enough market power to raise antitrust concerns. AT&T claims customers will benefit from new bundles and offerings made possible by the merger, and the combined company will "develop new ad-supported video models that shift more costs to advertisers and off consumers."
Since completing the acquisition a few weeks ago, AT&T has renamed Time Warner "WarnerMedia," one of its divisions and a separate unit from the rest of the company.
