AT&T, Time Warner Merger Approved by Judge

Judge set to determine fate of AT&T-Time Warner merger

Judge set to determine fate of AT&T-Time Warner merger

AT&T Inc won approval from a United States court on Tuesday to buy Time Warner Inc for $85 billion, without conditions, allowing AT&T to compete with internet companies that dominate digital advertising and providing new sources of revenue.

"This decision from Judge Leon will have broad ramifications for the tech, telecommunications and media sector for decades to come", said Daniel Ives, the chief strategy officer at GBH Insights.

"We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government's lawsuit to block our merger with Time Warner", he said in a statement.

"The government here has taken its best shot to oppose this merger", Leon said, speaking to a packed courtroom in an unusual session weeks after the trial ended. That's not to say that vertical mergers get through regulatory approval free and clear - the FTC has fought 22 vertical mergers since 2000 - but they receive less scrutiny than horizontal mergers.

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Before the trial started, AT&T lawyers said the Time Warner deal may have been singled out for government enforcement but Judge Leon of the US District Court for the District of Columbia rejected their bid to force the disclosure of White House communications that might have shed light on the matter.

The ruling is also a major blow to Donald Trump's Justice Department.

AT&T, which has invested heavily in a streaming video service called DirecTV Now, is free to bulk up its original programming with Time Warner content.

The industry is now turning its eyes to another potential megamerger - the fight between Comcast and Disney to acquire 21st Century Fox. The "drop dead" deadline for completing the merger is June 21. That would set up a showdown with Disney, which has already put in a bid for those assets.

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The Time Warner deal is a crucial achievement for Stephenson, who views AT&T as competing with Google, Facebook, Netflix and other Silicon Valley giants.

"The decision will very much send a signal as to what to expect from the DOJ in the future", Napolitano told FOX Business' Maria Bartiromo on "Mornings with Maria".

The government argued that AT&T would gain outsize market power, jacking up the prices it charges cable providers to carry networks in the Time Warner stable. In fact, sometimes a merger can help competition and consumer choice, as is more often the case with vertical mergers.

Those comments and his repeated criticism of CNN, which is owned by Time Warner's unit Turner Broadcasting, raised speculation that Trump had pushed Delrahim and the Justice Department to block the deal. Comcast and Verizon are also jockeying for position in the new landscape. The government alleged that by owning Time Warner, AT&T would have too much leverage in negotiations with television distributors, which would hurt competitors, harm innovation and could lead to increased cable prices for consumers. AT&T CEO Randall Stephenson also said previous year, "You shouldn't expect that we would sell something larger [than CNN] to get the deal done". Looming in the background of the deal has been Trump's long-running feud with Time Warner's CNN, which he has often derided as "failing" and a purveyor of "fake news".

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