The Industry

The Justice Department Wants to Go Another Round With AT&T Over Its Merger With Time Warner

An AT&T store on 5th Avenue in New York.
An AT&T store on 5th Avenue in New York.
KENA BETANCUR/Getty Images

The Department of Justice is appealing a federal court’s decision to approve the $85 billion AT&T-Time Warner merger last month.

U.S. District Judge Richard Leon’s ruling in favor of the merger on June 12, without any conditions imposed, came as a sharp rebuke to government prosecutors.  The DOJ’s notice to appeal, filed on Thursday, would renew the DOJ antitrust division’s fight against the merger, which it argued would decrease competition and increase prices for consumers. AT&T had argued that the merger would allow for better competition, especially with the rise of online video competitors such as Facebook, Google (parent of YouTube), Netflix, and Apple.

AT&T announced the merger in October 2016, but the DOJ sued to block it in November 2017. The trial lasted six weeks, ending in April. Leon issued his opinion in June.

The DOJ appeal comes in spite of Leon’s advice to government prosecutors: “I do not believe that the Government has a likelihood of success on the merits of an appeal.”

AT&T General Counsel David McAtee told USA Today, “While the losing party in litigation always has the right to appeal if it wishes, we are surprised tha the DOJ has chosen to do so under these circumstnaces. We are ready to defend the Court’s decision at the D.C.
Circuit Court of Appeals.”

Bloomberg noted that AT&T fell 0.9 percent to $31.95 in extended trading at 4:19 pm, after the announcement.

AT&T is already making big changes, even as the DOJ moves to appeal the merger decision. The telecom giant made headlines earlier this week for changes it wants to bring to HBO in order to compete with Netflix.