Trump administration fails to block AT&T/Time Warner merger

Trump administration fails to block AT&T/Time Warner merger

Leon has ruled in favor of AT&T in the government's antitrust suit to block AT&T's proposed merger with Time Warner . But Leon blocked discovery on certain White House communications that AT&T and Time Warner were seeking, and the companies dropped that defense, choosing to litigate the case on pure antitrust grounds. And the company said it plans to close the merger, which was announced a year and a half ago, on or before June 20.

At the heart of the DOJ's complaint is an assumption that the merged entity would use its market power to raise the price of content now owned by Time Warner, or threaten to withhold programming, including hit shows such as Game of Thrones and NCAA March Madness. The $85.4 billion merger was first put forth in October 2016, but a deal like this was met with intense scrutiny from regulators, as it will have major implications on the media landscape moving forward.

In making its case, the US government argued that the merger of AT&T could harm consumers in a number of ways.

On Tuesday, Wall Street considered Leon's decision a "canary in the coal mine" - or an indicator for whether Comcast could go ahead with an all-cash hostile bid for parts of 21st Century Fox. Remember, Time Warner owns CNN, which is the object of some of Trump's most focused hatred. We thank the Court for its thorough and timely examination of the evidence, and we compliment our colleagues at the Department of Justice on their dedicated representation of the government.

The theory seems to be that the merged company would simply forgo this revenue in a speculative hope that withholding Time Warner content from distributors would induce masses of viewers to switch to AT&T-and maybe, one day, put competitors out of business.

Leon is expected to deliver remarks from the bench before his final ruling appears on the court's docket.

Government lawyers had argued that the takeover would hurt innovation and allow AT&T to charge rival providers more for its must-have content - costs that would ultimately be passed on to consumers.

AT&T and Time Warner say the combined company can leverage viewer data to make better content to sell more targeted ads, which they claim could help lower prices for consumers.

Aetna, which is about to be acquired by CVS Health in a $68 billion deal, had its shares jump 3.5 percent, to $187.00.

Judge Leon has said he will issue his decision on AT&T's proposed deal today.

The Department of Justice had sued AT&T to block the merger.

The mega-merger was a high-stakes bet by AT&T Inc. on combining a company that produces news and entertainment with one that funnels it to consumers. In a statement, Delrahim said he was "disappointed" in the ruling but stopped short of saying his division would appeal, saying only that it would "consider next steps in light of our commitment to preserving competition".

President Donald Trump, who has advocated for the blocking of the deal, has criticized CNN for its coverage of his election campaign and his administration.

Updated 2:18 pm PT: This story was updated with comments from AT&T and the Justice Department.

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