The government will now seek a reversal of that ruling in the U. S. Court of Appeals for the District of Columbia Circuit, the court…
The government will now seek a reversal of that ruling in the U. S. Court of Appeals for the District of Columbia Circuit, the court which handles most of the leading antitrust cases. The DOJ’s case to stop the merger is one of the largest anti-trust actions of this generation and a centerpiece in the strategy of Assistant Attorney General Makan Delrahim, the head of the Antitrust Division.
The case is one of the first major antitrust cases of the digital era brought to prevent what is known as a “vertical integration” — when a merger combines companies up and down the supply chain; in this case, merging a content creator (Time Warner) and the telecom, cable, and satellite provider that will carry that content (AT&T, which already owns DirectTV).
Government action against vertical integration has been comparatively rare in recent decades, with the DOJ and Federal Trade Commission (FTC) more generally concerned with the anti-competitive effect of “horizontal integration,” where two companies that are competitors in the same space become one, and abusive practices by organically created monopolies.
Delrahim and DOJ-Antitrust’s suit against the AT&T-Time Warner merger bucked this trend, seeking to establish a norm against some vertical integration in the era of tech giants that increasingly offer products up and down the supply chain. That plan got a serious rebuke with Judge Leon’s ruling last month that the merger did not violate antitrust laws. DOJ’s willingness to appeal, however, indicates a confidence in their case and may lead to much more definitive and precedent-setting ruling in the D. C. Circuit.
The case also carries a political dimension. President Donald Trump, on the campaign trail, repeatedly expressed reservations about the deal, which includes ownership of CNN, the news network that frequently draws Trump’s ire. Since taking office, Trump has not commented on the deal itself, but in an exclusive interview with Breitbart News last year he showed amenability to a more aggressive stance on enforcing competition in the media world.
AT&T’s acquisition of Time Warner is already underway, so DOJ may also seek an injunction ordering the deal to halt while the appeal is decided on.
AT&T CEO Randall Stephenson reacted to the news by telling Fox Business’s Charlie Gasparino that he was “not surprised” and was prepared to take his case to the Supreme Court if the D. C. Circuit ruled for the government:
