Justice Department appeals AT&T-Time Warner merger


The Justice Department on Thursday filed notice that it is appealing a judge's approval of AT&T's purchase of Time Warner.

In his decision, Leon rejected the government's argument that acquiring Time Warner will give AT&T the power to raise prices that cable and satellite-TV companies pay for Time Warner content such as CNN, which in turn will lead to higher bills for consumers.

Leon, though, also warned against an appeal, writing in his decision "A$3 s my 170-plus page opinion makes clear - I do not believe that the Government has a likelihood of success on the merits of an appeal". "While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the (Justice Department) has chosen to do so under these circumstances".

David McAtee, AT&T's general counsel, said the company is "ready to defend" the judge's decision. The Justice Department had argued the deal would harm consumers. It's a very interesting and unexpected outcome but one to keep a watchful eye on going forward.

The logos for Time Warner and AT&T appear in June above trading posts at the New York Stock Exchange.

Leon had sharply urged the Justice Department not to seek a stay of his ruling, saying it would be "manifestly unjust" to do so and not likely to succeed.

The Justice Department will take their appeal to the DC Circuit Court of Appeals.

A Justice Department win at the appeals level would undo a stinging rebuke for the government and vindicate the decision by the head of the antitrust division, Makan Delrahim, to challenge the Time Warner takeover.

AT&T is a phone, cable and satellite company, and the biggest pay TV provider in the United States - claiming about 25 million of the approximately 90 million United States households that are pay TV customers. "AT&T and Time Warner concluded that each had a problem the other could solve", he wrote.

Mr Trump has publicly feuded with Time Warner's CNN, calling it "failing" and a purveyor of "fake news". Prosecutors argued that AT&T could inflate the price of HBO for other content distributors. Already the ruling has started opening the floodgates to deal making in the fast-changing worlds of entertainment production and distribution. Waiting in the wings are potential big-billions deals involving Verizon and CBS and T-Mobile and Sprint.