& cplSiteName &

DOJ Says Judge Erred in AT&T-Time Warner Merger Appeal

Jeff Baumgartner
8/7/2018
50%
50%

As it seeks to derail the already-closed $84 billion merger between AT&T and Time Warner, the US Department of Justice claimed Monday that the judge who approved it without restrictions did so without applying "fundamental principles of economics and common sense."

The U.S. Department of Justice brief, filed Monday with the US Court of Appeals for the District of Columbia Circuit, believes the judge made "two fundamental analytical errors: It discarded the economics of bargaining, and it failed to apply the foundational principle of corporate-wide profit maximization."

The DOJ brief comes to light almost two months after US District Court for DC Judge Richard Leon approved the AT&T-Time Warner combo, holding that the marriage would not yield higher prices and reduce competition in the pay-TV arena and that the government failed to prove that the deal would not be in the public interest. (See The US DOJ May Be Appealing the AT&T-Time Warner Merger Trial, AT&T Wins Big, Gets Bigger: Judge Approves AT&T-Time Warner Merger and AT&T Closes $84B Time Warner Takeover.)

Billing it as the first vertical merger case the US has needed to litigate in four decades, the DOJ argued in the brief that the outcome of the appeal "will shape the future of the media and telecommunications industries for years to come…"

The DOJ rekindled its position the merger will empower AT&T Inc. (NYSE: T) to use Time Warner's programming to raise the costs for pay-TV rivals -- and maximize profits -- while also helping AT&T protect its own video business.

More specifically, the DOJ held that a case was made with "reasonable probability" that the AT&T-Time Warner deal would boost Time Warner's bargaining position and substantially reduce competition, in violation of Section 7 of the Clayton Act, which governs M&A and joint ventures.

It added that the district court held otherwise "by erroneously ignoring fundamental principles of economics and common sense," and that those errors "distorted its view of the evidence…"

In response, AT&T, which had argued that it would not enjoy increased leverage given the hyper-competitive state of the US pay-TV industry, said that the judge's original decision poked sufficient holes in the government's case and should therefore stand.

"Appeals aren't 'do-overs,'" AT&T General Counsel David McAtee said in a statement provided to multiple media outlets. "After a long trial, Judge Leon weighed the evidence and rendered a comprehensive 172-page decision that systematically exposed each of the many holes in the Government's case. There is nothing in DOJ's brief today that should disturb that decision."

AT&T has until September 20 to file its response brief.

— Jeff Baumgartner, Senior Editor, Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
kq4ym
50%
50%
kq4ym,
User Rank: Light Sabre
8/17/2018 | 8:02:21 PM
Re: Meanwhile AT&T CFO Sez:
Yes, appeals are to argue mistakes the previous judge might have made legally or mistakes in technical aspects of the trial. It's not just hoping a new set of judges that might have a more friendly philosophy for the appelant.
DanJones
50%
50%
DanJones,
User Rank: Blogger
8/7/2018 | 4:20:58 PM
Meanwhile AT&T CFO Sez:
John Stephens said of the DOJ action today, that the case has had a thorough review from the judge: "This isn't a chance for a do-over, it just doesn't work that way."

 
Featured Video
From The Founder
John Chambers is still as passionate about business and innovation as he ever was at Cisco, finds Steve Saunders.
Flash Poll
Upcoming Live Events
September 12, 2018, Los Angeles, CA
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 6, 2018, London, United Kingdom
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
All Upcoming Live Events
Hot Topics
T-Mobile to Play the Customer Care Card With Layer3 TV
Jeff Baumgartner, Senior Editor, Light Reading, 8/15/2018
Australia Could Open 5G Door to Huawei
Robert Clark, 8/16/2018
Video Navigation Gets an AI Assist
Jeff Baumgartner, Senior Editor, Light Reading, 8/16/2018
Eurobites: Deutsche Telekom Pulls Out of Iran
Iain Morris, International Editor, 8/17/2018
Animals with Phones
When Your Cat Hijacks Your Tech Click Here
Latest Comment
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed