Federal Judge to Decide if AT&T Can Buy Time Warner

Govt argues that AT&T-Time Warner deal would hurt consumers
The Associated Press

Tuesday could mark the end of the long saga of AT&T’s pursuit of Time Warner.

U.S. District Judge Richard Leon’s is planning to announce Tuesday in a federal court in Washington, D.C., his decision on whether AT&T’s acquisition of Time Warner can move forward. The announcement is scheduled for 4:00 p.a. Tuesday.

The decision has the potential to reshape corporate America, especially at the unstable intersection of technology, telecommunications, and media. To be sure, companies such as Facebook, Netflix, Amazon, Google, and Disney will all be paying close attention.

A win for the government, which sued to block the deal 20 months ago, could curtail the survival-of-the-biggest approach that has led to ever more consolidation in telecom and media companies. It could set new legal precedent that would allow antitrust enforcement lawyers at the U.S. Department of Justice to more closely police mega-mergers and the growth of technology companies into communications and commerce conglomerations.

If AT&T wins the day, it will likely set off a new scramble for size, scale, and diverse offerings from Silicon Valley tech companies, traditional media companies, and telecommunications companies. American consumers could face a marketplace dominated by a few vertically integrated megacompanies that own social media networks, movie studios, television news and sports channels, wireless telephone networks, and cloud computing networks.

Of course, that scramble could prompt its own backlash. Capitol Hill lawmakers are increasingly critical of Facebook and Amazon. Instead of sitting back while giant tech-media-communications empires are built, Congress could decide to intervene by passing new laws regulating or even breaking up some of the largest players.

Many of those who watched the case carefully believe the odds are against an outright win in the case.  The toughest questions from Judge Leon were aimed at the government’s case, which indisputably seeks to break new legal ground. In fact, even some critics of the deal suspect that the federal judiciary may not be ready to strike down a merger between two companies which were not direct competitors, a so-called “vertical merger.”

The government argued that even if Judge Leon did not stop the deal altogether, he could block parts of it that have the most potential to give AT&T an anticompetitive advantage. In particular, the government asked Judge Leon to consider blocking the acquisition of Time Warner’s Turner Networks, which includes CNN. AT&T says that would be a dealbreaker.

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