Legal News

Judge Says DOJ Failed to Show AT&T, Time Warner Merger Would Lessen Competition
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

Game of Thrones. Photo courtesy of HBO.

Summary: The $85 billion AT&T and Time Warner merger has been approved by a judge. 

On Tuesday, a judge allowed the AT&T and Time Warner merger to move forward, sending the entertainment industry into an excited frenzy. The ruling was decided in a case brought on by the Department of Justice, who had argued that allowing the two titans to merge would be a violation of antitrust law.

  
What
Where


U.S. District Judge Richard Leon said that he did not find sufficient evidence that the media industry competition would be lessened if AT&T and Time Warner merged, according to The Hollywood Reporter. 

The trial lasted for six weeks and began in March after the Justice Department filed an antitrust lawsuit to stop the merger, which was valued at $85 billion. Leon’s task was to determine whether the merger between the telecommunication giant and the owner of CNN, HBO, and Time Warner was in violation of Section 7 of the Clayton Act.

The government had argued that the merger would render AT&T and Time Warner too powerful because AT&T also owns satellite company, DirectTV. They said that if AT&T owned popular content such as the NBA Playoffs and HBO’s Game of Thrones, then they would have too much power over consumers.

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!




The defendants countered that companies such as Netflix and Amazon produce and distribute their own content and that the internet has changed the way people view entertainment.

Leon said that this was not an ordinary antitrust case and that he considered the merger to be vertical, not horizontal.



“[T]he ‘familiar’ horizontal merger playbook is of little use,” Leon wrote. “That is, of course, because the proposed transaction between AT&T and Time Warner is a vertical merger — i.e., one that involves firms that do not operate in the same market and thus produce[s] no immediate change in the level of concentration in any relevant market. The parties therefore agree that in this case there is no short-cut way to establish anticompetitive effects, as there is with horizontal mergers.”

The Wall Street Journal’s Christopher Mims predicts that this merger will result in more expensive entertainment packages. He cited as proof for this theory AT&T’s acquisition of DirectTV. When this occurred, costs did not go down for consumers, but they were offered more extensive options such as more channels.

“In the future, you will pay lots of money for lots of entertainment options,” Mims said.

Mims said that consumers would prefer on-demand options at a cheaper price than huge bundles, but big entertainment companies are still refusing to offer this deal. Instead, they opt for triple play packages, which give bundle landlines, internet, and cable. Luckily, technology companies such as Netflix or Sling are attempting to disrupt this model and give customers more choice at more affordable prices.

What do you think of the merger between AT&T and Time Warner? Let us know in the comments below.



 

RELEVANT JOBS

Associate Attorney

USA-PA-Exton

ASSOCIATE ATTORNEY McKenna Snyder LLC, a law firm in Exton, PA has an immediate opening for an ex...

Apply now

Attorney

USA-MI-Sturgis

Qualifications: HaasCaywood is seeking associate attorneys for our Coldwater and Sturgis, Michiga...

Apply now

Attorney

USA-MI-Coldwater

Qualifications: HaasCaywood is seeking associate attorneys for our Coldwater and Sturgis, Michiga...

Apply now

Deputy General Counsel / Senior Deputy General Counsel

USA-CA-Sacramento

Cal Cities Culture and Mission Cal Cities is dedicated to creating a collaborative and inclusive ...

Apply now

BCG FEATURED JOB

Locations:

Keyword:



Search Now

Education Law Attorney

USA-CA-El Segundo

El Segundo office of a BCG Attorney Search Top Ranked Law Firm seeks an education law attorney with ...

Apply Now

Education Law Attorney

USA-CA-Carlsbad

Carlsbad office of a BCG Attorney Search Top Ranked Law Firm seeks an education law attorney with 4-...

Apply Now

Education Law and Public Entity Attorney

USA-CA-El Segundo

El Segundo office of a BCG Attorney Search Top Ranked Law Firm seeks an education law and public ent...

Apply Now

Most Popular

SEARCH IN ARCHIVE

To Top