Justice Department appeals Time Warner-AT&T merger approval
Justice Department appeals Time Warner-AT&T merger
approval
The government has filed to appeal the AT&T-Time
Warner merger.
The blockbuster deal won approval in June from a federal
judge, who did not impose conditions on the merger.
The Justice Department argues that the combined company
would decrease competition and raise prices for consumers.
By Christine Wang July
12, 2018 CNBC.com
The Justice Department will appeal the AT&T-Time
Warner merger approval, according to a court document filed Thursday.
Shares of AT&T slipped more than 1 percent in
after-hours trading following the announcement.
AT&T General Counsel David McAtee said the company
was surprised by the appeal.
“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," McAtee said in a statement.
"We are ready to defend the Court’s decision at the D.C. Circuit Court of
Appeals."
In June, a federal judge ruled that the $85.4 billion
deal was legal and imposed no conditions on the merger.
At the time, the Justice Department expressed its
disappointment with the ruling. The government argued that the deal would make
the pay-TV market "less competitive and less innovative."
But in his nearly 200-page opinion, U.S. District Court
Judge Richard Leon determined that the government failed to meet its burden to
establish that the deal would significantly decrease competition.
Since announcing its bid in October 2016, AT&T has
maintained that buying Time Warner would help the company compete against tech
companies like Amazon and Netflix. AT&T, the No. 2 wireless carrier in the
U.S., said the deal would help the company attract customers by bundling
entertainment with mobile service.
Leon had warned the government against using a stay to
postpone the deal's completion, saying it would be "unjust" and
"cause certain irreparable harm to the defendants." The Justice
Department ultimately decided against filing to delay the closing of the deal,
which was completed within days of the favorable ruling.
While the judge said an appeal was "fair game,"
Leon pointed out that the investigation and legal proceedings had run up a
"staggering cost" for both the companies and the government.
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