Categories Earnings, Technology

DOJ unwilling to let go, plans appeal against AT&T-Time Warner deal

The US Department of Justice will appeal against the approval of AT&T’s (T) acquisition of Time Warner (TWX). Following a lengthy antitrust trial, AT&T had earlier received a favorable ruling in June to acquire the media company. After dismissing the DOJ’s assertion that the merger would hurt competitors and consumers through high prices, limited choices and unfair practices, Judge Richard Leon asked the agency at the time to refrain from attempting to halt the merger while it mulled over an appeal.

Upon receiving permission, the telecom giant promptly completed the merger before its deadline of June 21 without giving room to Time Warner to walk away from the deal and demand a breakup fee. AT&T had agreed to several conditions to complete the merger, including running Turner Broadcasting as a separate unit, but the DOJ apparently remains unappeased.

Related: Unconditional union: A peek into AT&T – Time Warner verdict

Legal specialists believe that the DOJ considers this case as a crucial one that has the ability to influence the way vertical mergers will be looked at in the future. The agency has worked very hard to challenge this deal from the beginning and they want to do more through the appeal. Despite this, the DOJ might find it hard to get the decision overruled.

AlphaStreet had earlier reported on why we think an appeal would be a good idea. Deals like these can completely change the media-telecom-technology world where several companies from all these sectors can join forces with the help of vertical mergers, thus leading to a monopoly situation.

Related: Why the DoJ needs to appeal against the AT&T – Time Warner verdict

The merger has already paved the way for more companies in the media and telecom space coming forth to join forces in order to stay competent. One example is the ongoing Comcast-Fox-Disney (CMCSA, FOX, DIS) drama. This deal has also never been one of President Trump’s favorites and he has expressed his disapproval of it from the start, citing the same monopoly reasons.

Meanwhile, AT&T, which is busy making changes to its new combined business by already raising prices at DirecTV and pushing for a revamp at HBO, is all set to defend itself. The company said the court’s decision was thorough and logical and the chances of it getting overruled were at a minimum. AT&T is going ahead with its business plans as scheduled and is optimistic that its union with Time Warner is safe.

Related: Net neutrality and the AT&T-Time Warner ruling – what’s in it for us?

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