Media Consolidation: United States v. AT&T and Implications for Future Transactions [July 16, 2018] [open pdf - 456KB]
"On June 12, 2018, the U.S. District Court for the District of Columbia (D.C. District Court) ruled that the proposed merger of AT&T, Inc. (AT&T) with Time Warner Inc. (Time Warner) could proceed without conditions, after one of the most closely watched antitrust trials in recent memory. The companies announced their intent to merge in October 2016. After examining the transaction for over a year, the Department of Justice (DOJ) challenged the proposed merger in November of 2017, arguing that consolidation of AT&T, a communications and satellite television provider, with Time Warner, a programming aggregator, would substantially lessen competition in violation of Section 7 of the Clayton Act (15 U.S.C. § 18). The court, after conducting a six-week trial examining the evidence, held that the government had not met its burden of proof under Section 7. The AT&T/Time Warner merger closed on June 14, 2018. The case drew intense interest because it represented the first time in nearly 40 years that the federal government asked a court to block a proposed transaction between companies that did not compete within the same market, i.e., a 'vertical' transaction. (Most transactions challenged under Section 7 involve parties that do compete within the same market, i.e., 'horizontal' transactions.) Antitrust experts labeled the case 'enormously significant,' because challenges to vertical transactions are so rare and thus there is little precedent as to such cases."
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