After six weeks of litigation, a federal judge has approved AT&T’s acquisition of Time Warner, in a deal that could reshape the multi-media industry. Judge Richard Leon ruled that the government had not provided enough evidence to prove that the deal between AT&T and Time Warner violated any antitrust laws.
According to Leon, the Justice Department was unable to demonstrate that AT&T’s acquisition of Time Warner would lead to fewer choices for consumers or higher prices for television and Internet services.
“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. 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”, said David McAtee, AT&T General Counsel in a press release.
“We look forward to closing the merger on or before June 20 so we can begin to give consumers video entertainment that is more affordable, mobile, and innovative.”
The merger was the center of attention and slight controversy over the creation of what is being referred to as a “power house” of media and telecommunications.
The Justice Department was out to block the merger, an unusual move considering that the deal is combining two different kinds of companies, therefore two different products, based on the size of the companies and the repercussions of such merger.
Speculation over the Justice Department’s decision to challenge the merger has linked President Donald Trump as the reason why this lawsuit made this far. Though the Department of Justice denies any political influence, Trump had been very vocal about his disapproval for the merger during his Presidential campaign in 2016, with many citing his disdain for CNN, a Time Warner entity, as a catalyst for the case.
Although the merger has proven to be quite controversial, critics point out that such business endeavors are necessary for companies to compete in the video streaming era, a media landscape dominated by the likes of Netflix, Amazon and Hulu.
The merger could potentially create a monopoly where AT&T could limit the access to Time Warner’s content only to its own subscribers, forcing others to subscribe to be able to watch the exclusive content and creating a precedent for other companies to follow.
This would allow AT&T to take advantage of former Time Warner customers by persuading them to subscribe to AT&T to gain access to Time Warner’s videos and movies. This type of promotion would force consumers to sign up for AT&T services, giving them an unfair advantage over competitors.
This could also affect how news and information are delivered; the consequence of having a single source news outlets is rather problematic, as it eliminates having choices. A future of fewer news outlets to choose from could downright hinder the political landscape.
Furthermore, by merging both companies, this could mean having to pay more fees for access down the road. Consumers would not have a choice when they want to tune in and stream their favorite show or movie in the near future. In other words, there would be nothing stopping AT&T from raising prices for access to their content.
The deal that puts AT&T in charge of Time Warner’s extensive catalogue, which includes HBO, CNN, DC Comics and other valuable film franchises, such as Harry Potter, is expected to be finalized within the upcoming months for a reported $85.4 billion.