DOJ lays out case for AT&T-Time Warner appeal

DOJ lays out case for AT&T-Time Warner appeal
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The Justice Department (DOJ) on Monday said that a federal judge ignored the dangers of an AT&T-Time Warner merger when he ruled earlier this year that the companies could combine.

In an 86-page-filing to the U.S. Court of Appeals for the D.C. Circuit, the DOJ argued District Court Judge Richard Leon’s decision to approve the merger was reached “by erroneously ignoring fundamental principles of economics and common sense.”

The filing lays out the government's appeal as it seeks to block the merger.

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The government argues that Leon was wrong to reject their economic argument that AT&T buying Time Warner and gaining control over its popular programming would hurt customers. The government claims AT&T would be able to charge its rivals higher distribution prices for their programming, costs that would then be passed on to consumers.

In June, though, Leon ruled that the Justice Department failed to prove during trial that the merger would hurt competition. He also urged the government's lawyers not to seek a stay of his decision that would prevent the companies from merging while they considered an appeal.

The DOJ also argued that Leon erred by dismissing concerns expressed by AT&T's competitors and by AT&T itself when a similar merger was put forward in 2011.

“The lower court’s errors colored its view of the facts, leading to a decision that is simply wrong in light of the evidence the government presented at trial,” Makan Delrahim, the assistant attorney general for antitrust, said in a statement.

The Trump administration sued to block the $85 billion deal, which combined one of the country's telecommunications giants with an entertainment powerhouse.

Leon's ruling in June allowing the deal to go through was a blow to the DOJ and set the stage for other companies to move ahead with their merger plans.

AT&T completed the merger later that month despite the DOJ's plans to appeal the ruling.

AT&T, which has been optimistic about its chances in the appeals process, dismissed the government’s arguments on Monday.

“Appeals aren’t ‘do-overs,’” David McAtee, the telecom giant’s general counsel, said in a statement.

“After a long trial, Judge Leon weighed the evidence and rendered a comprehensive 172-page decision that systematically exposed each of the many holes in the Government’s case," he added.

"There is nothing in DOJ’s brief today that should disturb that decision.”

Updated at 5:04 p.m.