A federal judge has ruled in which AT&T can complete its $85.4 billion takeover of Time Warner, owner of several prominent media brands including Warner Bros., HBO as well as CNN.
US District Judge Richard Leon announced the decision through the bench at around 4:40 p.m. ET on Tuesday afternoon as well as released a written opinion; people began lining up the night before outside the courthouse to make sure they got a seat for the hearing. The ruling represents a pivotal moment for both President Donald Trump’s Justice Department as well as for a media industry upended by the growing domination of common internet content companies.
The government “failed to meet its burden” to establish in which the proposed merger could “lessen competition substantially,” Judge Leon wrote in his decision. The judge did not impose any conditions on the merger.
Additionally, Judge Leon urged the Justice Department not to stay his decision if the idea decided to appeal. He called such an outcome “manifestly unjust.”
In October 2016, AT&T announced its proposal to purchase Time Warner, joining a long tradition of telecommunications giants looking to acquire media companies. Comcast completed its acquisition of NBCUniversal in 2011, as well as Verizon has purchased websites like the Huffington Post as well as Yahoo. Such deals are attractive because they give cable giants control not just over how television shows as well as movies are made yet how the content will be distributed to millions of Americans — whether on their mobile phones, through broadband subscriptions, or on their cable as well as satellite televisions.
yet last November, the Justice Department sued to block the deal in a landmark antitrust move, arguing in which the merger could harm consumers by raising their costs, as well as hindering competition. AT&T as well as Time Warner, meanwhile, have argued in which their merger helps them to compete against the rise of tech behemoths like the online streaming service Netflix, as well as Google, which owns the internet’s biggest video company, YouTube.
David McAtee, AT&T’s general counsel, said the company was “pleased” with the ruling. AT&T could close the merger “on or before June 20,” McAtee said in a statement, as well as added in which the company looked forward to “[giving] consumers video entertainment in which will be more affordable, mobile, as well as innovative.”
The ruling reaffirmed the convention of vertical mergers — meaning the two companies in question do not compete with each additional — being approved by federal regulators. Usually, the idea will be horizontal mergers, or the merging of two direct competitors, in which are blocked, as was the case in 2016 when a federal judge did not allow Staples as well as Office Depot to become one company. currently, even more telecommunications giants could strike similar deals. Comcast as well as Disney are reportedly planning to put in offers to buy 21st Century Fox soon.
The decision will be also considered an overwhelming defeat for Trump’s Justice Department, which chose to pursue the antitrust case anyway, breaking with the norm. In a statement, assistant attorney general Makan Delrahim said he was “disappointed” with the court’s decision.
“We continue to believe in which the pay-TV market will be less competitive as well as less innovative as a result of the proposed merger between AT&T as well as Time Warner,” Delrahim said. “We will closely review the Court’s opinion as well as consider next steps in light of our commitment to preserving competition for the benefit of American consumers.”
The much-anticipated ruling will be also politicized. President Trump regularly disparages Time Warner-owned CNN, calling the 24-hour cable news channel “fake news.”
“As an example of the power structure I’m fighting, AT&T will be buying Time Warner as well as so CNN, a deal we will not approve in my administration because the idea’s too much concentration of power inside the hands of too few,” Trump said during a campaign speech in October 2016.
However, during the trial, Judge Leon reportedly rejected AT&T’s efforts to assert in which political interference was a problem inside the case. According to the brand new York Times, the government said Trump did not communicate with antitrust officials on the merger, as well as the the White House did not influence the DOJ’s decision to oppose the idea.
Zoe Tillman contributed reporting to in which story.