Despite initially approving AT&T’s acquisition of Time Warner, the Department of Justice later said it would appeal the merger. As part of those efforts, the DOJ has filed its opening brief with the Washington D.C. District Court of Appeals as it looks to protest the June decision that allowed the merger to move forward…
In the brief, the Justice Department explained that companies such as Dish Network and Charter would not only be AT&T’s competitors, but they would also be customers as they negotiated for Time Warner content. This relationship gives AT&T an unfair bargaining advantage over competitors, the department wrote.
This, the DOJ says, will ultimately lead to consumers paying far more for pay-television services, with distributors inherently passing on the higher costs to their customers (via CNET):
Further, the DOJ says that the merger between Time Warner and AT&T is “vertical,” meaning that it’s two different companies in different business combining. The outcome of this case can have major effects on the future of the television and telecommunications industry.
The initial decision that allowed the merger to go through was faced on “faulty logic and a deeply flawed assessment of the government’s evidence,” the DOJ wrote according to The Washington Post:
The initial deal was approved at $85 billion, but now that it is in limbo and facing push back from regulators, it’s unclear what the future will bring.
That leverage, regulators had said, would give AT&T an advantage in future negotiations with TV distributors whose customers demand Time Warner content.
