DOJ Argues AT&T-Time Warner Approval Ignored Common Sense

The U.S. Department of Justice (DOJ) has officially filed an appeal in response to D.C. District Judge Richard Leon's ruling in favor of a merger between Time Warner and AT&T. The agency hopes to block the merger from proceeding despite the transaction having already been closed by the carrier, stating that the ruling was "erroneous" and tossed aside "fundamental principles of economics and common sense." More directly, the department still harbors concerns that AT&T will use its new-found power as both a content distributor and license holder to stifle competition. That's an argument the DOJ has been putting forward since it first spoke out against the deal, following its announcement back in 2016. According to the new filing, the ruling failed to account for principles that lead companies to place profits before consumer-friendly practices in favor of AT&T and its DIRECTV holding. The justice department argues that competing services will be either denied or forced to pay more for content which would previously have been available without bias.

In the meantime, the carrier's lead representative has said that there is nothing new in the agency's briefing that will affect the case or impact the prior decision to allow the merger. The company had previously contended that a merger would bring together complementary services and allow the new organization to better fend off rivals amidst trends toward cord-cutting and media streaming. Judge Leon eventually sided with AT&T and its now-subsidiary Time Warner, basing his decision on a need to provide the company with a means to increase competitiveness against its competitors in the space.

AT&T also argues that the appeals process is not about receiving a 'do-over' and appears to be taking its time in responding to the appeal. The company has yet to submit its own briefing but reportedly plans to do so by September 20. That long timeframe allotted to AT&T could be particularly beneficial to the company since it allows more time for it to become more fully established as a single corporation. Although not unheard of, the probable constraints and challenges associated with separating everything out again could potentially make it much less likely that a presiding judge will order AT&T to break things up again.

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