Nation & World

AT&T-Time Warner merger approved

Stage set for more consolidation

Reuters

Once the deal is closed, AT&T will control highly sought after programming and the infrastructure that delivers that content to tens of millions of televisions and smartphones.
Reuters Once the deal is closed, AT&T will control highly sought after programming and the infrastructure that delivers that content to tens of millions of televisions and smartphones.
/

A federal judge approved AT&T’s $85 billion purchase of Time Warner on Tuesday, handing the telecom giant a massive victory that could clip the ambitions of U.S. regulators seeking to block big corporate tie-ups.

The case — one of the most closely watched antitrust trials in decades — is viewed as a bellwether for other deals waiting in the wings. From Comcast’s bid for 21st Century Fox to CVS’s acquisition of Aetna, massive corporations increasingly have sought to expand their reach by buying up companies in different lines of business.

The judge’s decision, which is allowing AT&T to merge with Time Warner without conditions, shows the federal government may struggle to rein in such mergers.

“I think for business, in general, it’s going to be seen as a green light for mergers. I think you’ll see a lot of people using it as an opportunity to push mergers they may have been thinking about,” said Ed Black, president of the Computers and Communications Industry Association, a trade group in Washington, D.C., that represents companies such as Amazon, Facebook and Google.

In handing down his ruling, federal judge Richard Leon said the Justice Department — whose antitrust chief, Makan Delrahim, brought the rare case — failed to provide sufficient proof that the deal would harm competition or consumers.

He also warned the U.S. government against bringing an appeal if the purpose was to try to stymie the deal, though the Justice Department has not indicated its next steps.

To AT&T, however, goes the grand prize — a premier piece of the entertainment world. The decision means the telecom giant now will control highly sought after programming — including “Game of Thrones,” the “Harry Potter” movie franchise and CNN — as well as the infrastructure that delivers that content to tens of millions of televisions and smartphones.

ARTICLE CONTINUES BELOW ADVERTISEMENT

Beyond its wireless network and internet service, AT&T acquired DirecTV in a $67 billion deal in 2015, which also had the blessings of government regulators.

Ahead of the ruling, public-interest advocates had expressed deep fears that AT&T’s victory would only quicken the rapid consolidation of the media, telecom and tech industries.

“Everyone’s looking at here what happens in entertainment,” said Gene Kimmelman, the president of Public Knowledge. “But if Google and Facebook get the signal the court will not let the government block vertical transactions, then the door is open for them buying more artificial intelligence firms, more messaging firms, more data-gathering firms.

“I think what you see is everybody bulks up in their space.”

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.

CONTINUE READING

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.