Jun 12, 2018

Judge rules that AT&T can buy Time Warner

Illustration: Sarah Grillo, Caresse Haaser/Axios

AT&T will be allowed to complete its $85 billion acquisition of Time Warner, with a federal judge on Tuesday rejecting an antitrust challenge by the U.S. Justice Department.

Why it matters: The ruling is expected to set off a chain reaction of other mega-mergers, while the AT&T-Time Warner tie-up will remake the media, tech and telecom landscapes by creating a media powerhouse that controls premium content as well as the networks that distribute it.

During a lengthy trial, opposing lawyers presented vastly different consequences of a potential merger.

  • DoJ argued that AT&T, which owns the video provider DirecTV, would use the threat of withholding Time Warner’s content to hurt its competitors in the video space.
  • AT&T argued it needs to buy Time Warner not to compete with their old-school telecom and pay-TV rivals, but new players like Facebook, Google and Netflix.

The ruling: Judge Richard Leon roundly rejected the government’s primary theories about how the deal could harm consumers, giving AT&T a "clean" win. Many had expected that even a ruling favorable to AT&T would require at least some concessions.

  • He also said that the government had given its "best shot" to blocking the merger, and he urged DoJ not to seek an emergency stay that could complicate the deal's expected closing next week (while noting that the government could still appeal).
  • “The court has spoken,” he said.

Speaking at a press conference after the ruling, AT&T lawyer Daniel Petrocelli said "we're disappointed that it took 18 months to get here, but we are relieved it is finally behind us and we look forward to closing the transaction in the upcoming days." It's been about 600 days since AT&T first announced the deal in October 2016.

  • When asked if AT&T can guarantee that prices will not increase for consumers, Petrocelli said, "As the evidence in the trial shows, this will only benefit consumers."

By ruling in favor of AT&T, Judge Leon effectively affirmed longstanding government sympathies toward so-called vertical mergers, or deals in which the two companies are in different industries (telecom and media, in this case).

What's next: Comcast is expected to make an all-cash bid for the entertainment assets of 21st Century Fox, setting up a battle with The Walt Disney Co.

Statement from AT&T:

"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. 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."

Statement from U.S. Assistant AG Makan Delrahim, who earlier today defended DoJ's approach:

“We are disappointed with the Court’s decision today. We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner. We will closely review the Court’s opinion and consider next steps in light of our commitment to preserving competition for the benefit of American consumers.”

Read the full court opinion:

Go deeper

In photos: Authorities issue warning as Americans venture out for Memorial Day weekend

Venice Beach in Los Angeles on May 24. Photo: David McNew/Getty Images

Authorities urged Americans to maintain social distancing and wear masks against the coronavirus amid reports of packed beaches and bars during the Memorial Day weekend.

Driving the news: Law enforcement stepped up beach patrols, authorities on Florida's Gulf Coast closed parking lots because they were full and there were crowded scenes at Lake of the Ozarks bars in Missouri, per AP, which reports a shooting injured several people at a packed Daytona Beach in Florida.

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 9:30 p.m. ET: 5,405,029 — Total deaths: 344,997 — Total recoveries — 2,168,408Map.
  2. U.S.: Total confirmed cases as of 9:30 p.m. ET: 1,642,021 — Total deaths: 97,698 — Total recoveries: 366,736 — Total tested: 14,163,195Map.
  3. World: White House announces travel restrictions on Brazil, coronavirus hotspot in Southern Hemisphere Over 100 coronavirus cases in Germany tied to single day of church services — Boris Johnson backs top aide amid reports that he broke U.K. lockdown while exhibiting symptoms.
  4. Public health: Officials are urging Americans to wear masks headed into Memorial Day weekend Report finds "little evidence" coronavirus under control in most statesHurricanes, wildfires, the flu could strain COVID-19 response
  5. Economy: White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election — Public employees brace for layoffs.
  6. Federal government: Trump attacks a Columbia University study that suggests earlier lockdown could have saved 36,000 American lives.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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Updated 1 hour ago - Politics & Policy

Republicans sue California over mail-out ballot plan

California Gov. Gavin Newsom during a February news conference in Sacramento, California. Photo: Justin Sullivan/Getty Images

President Trump accused Democrats of trying "Rig" November's general election as Republican groups filed a lawsuit against California Sunday in an attempt to stop Gov. Gavin Newsom (D) from mailing ballots to all registered voters.

Driving the news: Newsom signed an executive order this month in response to the coronavirus pandemic ensuring that all registered voters in the state receive a mail-in ballot.