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U.S. appeals court to hear arguments to stop AT&T purchase of Time-Warner

Reuters  |  WASHINGTON 

By Diane Bartz

WASHINGTON (Reuters) - The goes before an appeals court on Thursday to urge a three-panel to overturn a lower court ruling and order Inc to undo its $85.4 billion purchase of entertainment company Time Warner, one of the largest ever.

The deal was seen as a turning point for an industry upended by companies like and Alphabet Inc's Google, which go directly to consumers online rather than via providers like AT&T's

The deal was significant for two other reasons. First, Donald Trump, who has famously tangled with Time Warner's CNN, has vociferously opposed the deal. Second, it's a rare instance of the government seeking to stop a merger of a distributor and a supplier, a so-called "vertical merger."

The Justice Department filed its lawsuit to stop the deal in November 2017, arguing that AT&T, which owns DirecTV, would use its ownership of Time Warner's content, like and HBO's "Game of Thrones" to make rivals pay more, thus raising their costs and increasing consumers' cable bills.

The government estimated costs to industry rivals, such as Charter Communications Inc, would increase by $580 million a year if owned

AT&T, the No.2 U.S. by subscribers, denied that prices would go up and argued that the purchase of would give it information about viewers needed to better compete in the changing entertainment marketplace and allow it to target digital advertising, much like and already do.

In a scathing opinion, concluded that the government had failed to prove its case.

The argument to overturn Leon's decision will be heard by Judges Judith Rogers, a Clinton nominee, Robert Wilkins, nominated by Barack Obama, and David Sentelle, named to the bench by

Although the merger closed on June 14, shortly after Leon's opinion, has said it would manage Time Warner's Turner as part of a separate business unit until February 2019 or the conclusion of the government's appeal.

AT&T said in October that was preparing to launch a subscription video service by the end of 2019 that will offer movies and TV shows from Hollywood's biggest library, including films like "Casablanca," as well as licensed programming from other companies and, within a year, original content, a top told

The merger, including debt, would be the fourth largest deal in the global telecom, media and entertainment sector, according to data. It would also be the 12th largest deal in any sector, the data showed.

(Reporting by Diane Bartz; editing by Jonathan Oatis)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, December 06 2018. 16:35 IST
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