A federal judge approved AT&T's $85 billion purchase of Time Warner on Tuesday (June 12), handing the telecom giant a massive victory that could clip the ambitions of USA regulators seeking to block big corporate tie-ups.
"This decision from Judge Leon will have broad ramifications for the tech, telecommunications and media sector for decades to come", Daniel Ives, the chief strategy officer at GBH Insights, told Business Insider in an email before the decision was handed down. Post-merger, AT&T rivals like Charter Communications and Cox, which now pay Time Warner for its channels, would suddenly also become AT&T's customers.
"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", McAtee said in a statement.
But AT&T failed to provide any evidence suggesting that the DOJ's prosecution of the merger had "discriminatory effect and discriminatory intent", Leon said in a ruling earlier in the trial.
In making its case, the US government argued that the merger of AT&T could harm consumers in a number of ways. "I think you'll see a lot of people using it as an opportunity to push mergers they may have been thinking about", said Ed Black, president of the Computers and Communications Industry Association, a trade group in Washington that represents companies like Amazon, Facebook and Google.
The AT&T and Time Warner merger has officially been approved. The companies then entered into discussions with the DOJ past year and rumors surfaced that the agency had suggested some divestitures in order for AT&T to avoid an antitrust lawsuit. The company will now work to complete the merger by June 20th.More news: Canada's PM is back-stabber unworthy of Trump's time, trade adviser says
Dallas-based AT&T is a wireless, broadband and satellite behemoth that also became the country's biggest pay-TV provider with its purchase of DirecTV.
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.
The ruling is expected to unleash more deal-making.
The DOJ has argued that this type of consolidation would give the merged AT&T-Time Warner the ability to raise prices, thwarting the competition's ability to compete by forcing them to raise prices to maintain carriage rights. Comcast, for instance, owns NBCUniversal, and Verizon owns websites including Yahoo and HuffPost. 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".
Analysts say the judge's go-ahead will likely rewrite the rules on how courts apply antitrust laws, paving the way for a number of other potential sales involving names like Comcast, Disney, 21st Century Fox and several other content creation and distribution companies. He rejected the government's argument that it would hurt competition in pay TV and cost consumers hundreds of millions of dollars more to stream TV and movies. AT&T is known to most consumers as a telecom company, offering cable, internet and phone services, but this is just the latest in a line of mergers from such companies trying to break into the media landscape.