DOJ appeals "clearly erroneous" approval of AT&T, Time Warner merger

The district court judge who approved the merger ingored "fundamental principles of economics and common sense," the government argues.
Written by Stephanie Condon, Senior Writer

The Justice Department on Monday filed its appeal against the district court ruling that gave the green light to AT&T's $85 billion acquisition of Time Warner. The district court judge who approved the merger reached his "clearly erroneous" decision by making "fundamental errors of economic logic and reasoning," the government appeal argues.

Specifically, the government argues, the ruling rested on "two fundamental analytical errors: it discarded the economics of bargaining, and it failed to apply the foundational principle of corporate-wide profit maximization."

In the appeal, filed in the US Court of Appeals in Washington, the federal government once again argues that the merger harms consumers by empowering AT&T to raise the prices its competitors pay for valuable Time Warner programming. The deal also helps AT&T protect its satellite-television business from competition, the Justice Department says.

AT&T already announced the closure of the deal in June, just two days after US District Court Judge Richard Leon approved it without any conditions.

In his ruling, Judge Leon said he would refuse to stay his ruling during an appeals process. However, he argued that the Justice Department's appeal would not be harmed without a stay. Should DOJ win its appeal, the Circuit Court would have no qualms about unwinding the merger, Leon wrote.

In a statement to ZDNet's sister site CNET, AT&T General Counsel David McAtee said there's nothing in the brief filed Monday that should disturb Judge Leon's ruling.

"Appeals aren't 'do-overs,'" McAtee said. "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."

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