AT&T court fight with U.S. Justice Department heads into closing arguments

April 30, 2018

Lawyers for the U.S. Justice Department and AT&T will give closing arguments on Monday in a trial to determine if the wireless giant, owner of pay TV provider DirecTV, will be allowed to buy movie and TV show maker Time Warner.  

The Justice Department sued to block the $85 billion deal, saying it would lead to higher prices for rival pay TV companies.

 

The government has argued that AT&T viewed the merger as a way to convince viewers to stick with pay TV instead of moving to cheaper online providers, at one point quoting from a report in which an AT&T executive said that buying Time Warner would allow AT&T to slow the decline of pay TV subscriptions, which was described as a “cash cow.”  

AT&T’s satellite television service DirecTV lost 187,000 traditional U.S. video customers in the first quarter of 2018.  

 

 

The judge’s decision, which is expected in several weeks, will guide dealmakers on how aggressive they can be in buying suppliers, what is known among antitrust people as a vertical merger. Until this tie-up, vertical deals were largely considered approvable by regulators.

Read more at Reuters

^