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Justice Department Appeals AT&T-Time Warner Approval

14 July 2018

As a candidate for president, Donald Trump said he opposed the deal, say it would be "too much concentration of power in the hands of too few". AT&T completed its acquisition of Time Warner on June 14 and formed WarnerMedia a day later.

During the trial, the DOJ argued the vertical merger, a merger between two companies in the same industry but at different stages of the business, would reduce competition and hurt consumers by allowing the company to have greater control in negotiations with programmers.

Some legal experts believe it would be hard for the government to convince an appeals court to overturn Judge Leon's ruling. Everyone has the right to appeal.

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The appeal could be seen as a warning sign for companies that have pursued their own mergers in the wake of Leon's decision, Kimmelman added. It was the first time in decades the government had challenged that doctrine by suing to block a vertical merger.

David McAtee, AT&T's general counsel, said the company is "ready to defend" the judge's decision. The transition to streaming services, away from traditional cable, is one that's costing pay TV companies millions of subscribers and billions in revenue every year.

This fuelled speculation that Trump could be retaliating due to critical coverage of his administration from news broadcaster CNN, which was part of Time Warner.

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Leon had sharply urged the Justice Department not to seek a stay of his ruling, saying it would be "manifestly unjust" to do so and not likely to succeed.

It has committed to certain conditions under which it will run Time Warner's Turner Broadcasting, which includes CNN.

Leon ruled that the tie-up between AT&T's wireless and satellite businesses with Time Warner's movies and television shows was legal under antitrust law.

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Federal lawyers contended that the combined company would be too large and powerful, allowing it to run roughshod over other players in the entertainment and media world and to hike prices on consumers.

Justice Department Appeals AT&T-Time Warner Approval