Caufield & James, L.L.P Caufield & James, L.L.P

Serving clients in Hawaii and throughout California, including Sacramento, Fresno, San Francisco Bay Area, Los Angeles, Bakersfield, Chico, Jackson, and San Diego

Call us now toll free:866-585-8944
search Navigation Menu

Appeals court gives approval for AT&T takeover of Time Warner

In a case that is of interest to many Californians, a massive merger of media giants has been affirmed by the U.S. Court of Appeals for the Federal Circuit. The decision paves the way for AT&T to take over Time Warner for $81 billion.

The merger had been challenged by the Justice Department on antitrust grounds. The government argued the merger would negatively affect competition in the media broadcast arena. It further argued that diminished competition would harm consumers.

The transaction was deemed by the Justice Department as a vertical merger. AT&T is a large broadband and pay TV provider, presently holding more than 25 percent of the pay-TV market. Time Warner provides some of the most popular cable networks on television. The government argued the merger may permit AT&T to deny access to those networks to non-subscribers.

Merger advocates argued the real target of the merger is to compete directly with the growing streaming TV market. A number of popular entertainment channels provide viewing on demand for a monthly fee or fee per use. On appeal, the appellant asserted that the dynamics of the media industry wasn't fully appreciated by the trial court. The Court of Appeals rejected this argument.

The Court of Appeals wrote that the government failed to meet its burden of proof in showing the merger would detrimentally affect trade or harm consumers. The Justice Department's final step would be to seek review by the Supreme Court. Antitrust attorneys familiar with the case feel the chances of the Supreme Court overturning the decision are slim. Consumers will most likely learn in the near future if the government's fears are valid.

Mergers and acquisitions can present some tricky legal issues for corporations. With help from experienced corporate counsel, however, such business actions could be completed successfully.

No Comments

Leave a comment
Comment Information

Contact us now to begin a confidential case evaluation:

Caufield & James, L.L.P

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

[an error occurred while processing this directive]