The decision is a big defeat for the Justice Department's top antitrust chief, Makan Delrahim.
A federal appeals court upheld AT&T’s $85 billion merger with Time Warner on Tuesday, handing the telecom giant a major victory in its months-long legal battle against Justice Department regulators who had alleged the deal was anti-competitive.
The outcome is a major defeat for the Justice Department’s top antitrust chief, Makan Delrahim, who legal analysts say took a big risk in suing AT&T and who has now lost twice at court. The Justice Department didn’t immediately respond to a request for comment, nor to whether the agency will seek to escalate the case to the Supreme Court.that the lower court had misapplied “fundamental principles of economics” when assessing the deal’s potential impact on consumers and AT&T’s rivals.
According to the Justice Department’s appeal, the U.S. District Court for the District of Columbia ignored how AT&T could use its control over Time Warner to raise its competitors’ costs. And, it said, AT&T had an incentive to do so because company executives would naturally seek to use both their ownership of entertainment content and AT&T’s massive distribution network to maximize the company’s overall profits.
But the U.S. Court of Appeals for the D.C. Circuit held that the lower court adequately considered those factors, and that offers by AT&T to negotiate channel prices through arbitration with competing cable companies and TV providers would reduce the likelihood of harms to competition. “While we respect the important role that the U.S. Department of Justice plays in the merger review process, we trust that today’s unanimous decision from the D.C. Circuit will end this litigation,” AT&T said in a statement.
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