Department of Justice Raises Pointed New Questions in AT&T-Time Warner MergerA brief filed Monday alleges the trial judge in the case disregarded “[the] fundamental principles of economics and common sense.”
In June, following a grueling six-week trial, a federal court approved AT&T’s acquisition of Time Warner for approximately $85 billion in cash and stocks. At the time, critics cautioned that the ruling could trigger a wave of mergers that punish consumers and consolidate wealth among the corporate class. In a brief filed Monday, the Justice Department went one step further, claiming the trial judge disregarded “[the] fundamental principles of economics and common sense.”
“U.S. District Judge Richard J. Leon had ruled for the companies, saying the government didn’t come close to proving its claims that the deal would yield higher prices and less competition in the pay-TV industry,” writes The Wall Street Journal’s Brent Kendall. “But the Justice Department … said the judge ignored the fact that corporations will do what they can to maximize profits and instead accepted without reservation the testimony of defendants’ executives.”
During the trial, the federal government argued that the acquisition amounted to a media monopoly, with AT&T dominating not only the distribution of paid-TV services but its top content as well. (Time Warner owns both HBO and the Turner networks, two of cable television’s crown jewels. It’s also the parent company of CNN, fueling speculation that the Department of Justice had attempted to block the merger as punishment for the network’s critical coverage of the Trump administration.) AT&T and Time Warner countered that their companies complemented one another, and that it was incumbent on them to merge in a market where more and more viewers are cutting the cord.
In a 172-page decision, Leon ruled in the multinational’s favor. But as the Journal reports, transcripts from the trial contain several “unusual moments.” They include: “Judge Leon’s raising apparent concern about the Justice Department’s use of younger attorneys, and an AT&T lawyer talking about a contribution toward a fund for the unveiling of a painting commemorating the judge.”
The Journal also suggests that Leon went out of his way to shield AT&T Chief Executive Randall Stephenson from the Justice Department’s legal team, upbraiding one attorney for attempting to question him about an appearance on CNBC in 2016. “Don’t pull that kind of crap again in this courtroom,” the judge reportedly warned.
A former attorney for the Immigration and Naturalization Service, Leon was appointed to the United States District Court for the District of Columbia by then-President George W. Bush in 2001.
AT&T was defiant amid news of the Justice Department’s filing. “After a long trial, Judge Leon weighed the evidence and rendered a comprehensive … decision that systematically exposed each of the many holes in the government’s case,” its general counsel, David McAtee, said in a statement. “There is nothing in DOJ’s brief today that should disturb that decision.”
Read the full report at The Wall Street Journal.Wait, before you go…
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