Federal Judge Richard Leon has ruled in favor of AT&T’s $85 billion acquisition of Time Warner.
Donald Trump did not support the potential merger when it was announced on October 22, 2016, due to the size of the two companies, according to CNN. Trump even declared that his administration would not allow the deal to happen.
“AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” Trump said 15 days before he was elected President of the United States.
Indeed, the deal would be one of the largest in media and telecommunications business history. That’s the entire purpose though. AT&T claims that they need Time Warner in order to stay alive in its area of business and compete against titans like Netflix, Amazon, Disney and Verizon.
This argument has value as two big companies Disney and Comcast are bidding for parts of 21st Century Fox which include its film division 20th Century Fox. This film company owns many film franchises including Deadpool, X-Men, How to Train Your Dragon, the Star Wars prequel trilogy, the Star Wars original trilogy (without the remastered edits), etc.
Disney was the first to make its move though and intends to acquire these parts for over $50 billion in stock. However, the Department of Justice Antitrust Division is still reviewing this deal. Meanwhile, Comcast is considering to bid against Disney, offering $60 billion in cash to acquire parts of 21st Century Fox.
In November 2017, this same antitrust division sued to stop AT&T’s acquisition of Time Warner, claiming a competition would decrease and prices would increase for consumers.
In the past six weeks, a trial occurred and the Justice Department failed to prove that the deal violates antitrust laws, according to Leon.
The department could still attempt to appeal Leon’s decision, potentially killing this deal. The merger deadline is June 21. After this deadline, either one of the companies can walk away from the deal. Also, after revealing his ruling, Leon continued to warn the Justice Department to be more careful and not seek an appeal because its case is weak and may do more harm than good.
AT&T intends to close the deal by June 20.. With ownership of Time Warner, AT&T would own subsidiaries including HBO, CNN, Warner Bros. Entertainment and Adult Swim. AT&T will use this merger to leverage viewership data, producing content that sells more targeted ads and lowers prices for consumers, according to CNN.
With great powers comes great responsibility but also a greater chance of corruption. Hopefully, this ruling leads to a more prosperous future for consumers and not the opposite.
