United States v. AT&T (2019)
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| U.S. v. AT&T (2019) | |
|---|---|
 | |
| Court | United States Court of Appeals for the District of Columbia Circuit |
| Full case name | United States of America v. AT&T Inc., et al. |
| Argued | December 6, 2018 |
| Decided | February 26, 2019 |
| Citation | 916 F.3d 1029 |
| Case history | |
| Prior history | 310 F.Supp.3d 161 (D.D.C., 2018) |
| Holding | |
| The U.S. government was unable to prove that the takeover of TimeWarner by AT&T was harmful to competition or consumer welfare. | |
| Court membership | |
| Judges sitting | Judith W. Rogers, Robert L. Wilkins, David B. Sentelle |
| Laws applied | |
| Antitrust law | |
United States v. AT&T, 916 F.3d 1029 (2019), was a ruling of the United States Court of Appeals for the District of Columbia Circuit,[1] which prevented the U.S. government from blocking a merger between AT&T and Time Warner, thus creating the WarnerMedia conglomerate. The court found that regulators were unable to prove harm to consumers per the requirements of United States antitrust law.[2]
AT&T first announced plans to acquire Time Warner in October 2016. The acquisition would give AT&T significant holdings in the media content industry for the first time, and would allow the company to compete more fully with its primary telecommunications rival, Comcast, which had recently acquired NBCUniversal under a similar strategy.[3][4] The proposal attracted criticism because AT&T could potentially use its expanded influence over both media content and delivery networks to prioritize its own content or discriminate against that of its competitors.[5]
In February 2017, Time Warner shareholders voted to approve the takeover by AT&T,[6] and Federal Communications Commission Chairman Ajit Pai refrained from having that agency review the merger, so a full governmental review was conducted by the Department of Justice.[7] President Donald Trump voiced his opposition to the merger, believing that it would grant more influence to news organizations like CNN that had criticized him, though Trump Administration officials vowed to review the deal without prejudice.[8][9]
In November 2017, the Department of Justice filed an antitrust lawsuit to block the acquisition. Makan Delrahim, assistant Attorney General of the agency's Antitrust Division, stated that the deal would "greatly harm American consumers".[10] The Department sought an injunction to prevent the merger from being completed.[11]
District court proceedings
The case was first heard at the United States District Court for the District of Columbia in 2018.[12] In June of that year, Judge Richard J. Leon ruled in favor of AT&T, holding that the government had failed to provide evidence that the proposed takeover of Time Warner by AT&T would reduce competition.[11] In a ruling spanning nearly 100 pages, Leon held that recent developments in the media content marketplace required a more precise antitrust analysis, with AT&T's arguments in favor of the merger being more convincing and based upon current marketplace realities.[12]
Leon ruled that the Department of Justice had failed to show that the Time Warner media properties would gain unfair leverage over the marketplace after becoming part of the AT&T conglomerate, or that media consumers would be harmed, or that AT&T would use its control of telecommunications delivery networks to discriminate against other companies' content.[12] Thus, the government's attempt to prevent the takeover was denied.[13][14] The acquisition of Time Warner by AT&T was finalized two days later, creating the newly-named conglomerate WarnerMedia.[15]
In July 2018, the Department of Justice appealed the decision to the United States Court of Appeals for the District of Columbia Circuit. Even though the merger was in progress by that point, the agency appealed in the belief that the newly combined company could easily be separated again if the appeal were to be successful.[16]