A trial judge failed to apply both basic economic principles and common sense in his decision to approve AT&T’s acquisition of Time Warner, the US Department of Justice (DoJ) argued in an appeals court filing.
The DoJ claimed Judge Richard Leon “substantially constrained the government’s presentation of evidence” in support of its assertion the merger would harm competition by giving AT&T a bargaining advantage over pay-TV rivals.
It added the court’s distorted view of facts resulted in a “clearly erroneous” decision based on “implausible” reasoning which overlooked the “foundational principle” that corporations will seek to maximise profits.
The filing lays the groundwork for the DoJ’s attempt to overturn Leon’s approval of the deal in appeals court.
However, in a statement, AT&T general counsel David McAtee dismissed the latest challenge: “Appeals aren’t do-overs. 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. There is nothing in DoJ’s brief today that should disturb that decision.”
AT&T closed its deal with Time Warner two days after Leon gave the green light in June. It has since begun the work of integration and set its sights on building new entertainment audiences in the “tens of millions”.
The DoJ appealed the decision in July, seeking an accelerated court process which could yield a fresh ruling by early 2019.