AT&T and Time-Warner wasted no time completing their merger after the Department of Justice decided not to seek an injunction against the deal on Thursday. It is now complete. AT&T is the proud new owner of Game of Thrones, DC Comics, CNN, Harry Potter, and numerous other properties to leverage in its quest to crush its enemies.
On Tuesday, a judge ruled that the DOJ did not sufficiently argue the merger would harm consumers. The Justice Department was given six days to decide if it would seek an injunction. The time limit was determined based on an agreement between the two companies that AT&T would pay Time-Warner a $500 million “reverse termination fee” if the deal wasn’t complete by June 21. The DOJ’s decision not to stay the case does not mean it’s given up its right to appeal the court’s decision.
It came as a surprise that this administration decided to challenge the merger last fall. The agency’s top antitrust cop Makan Delrahim was generally understood to be very open to corporate mergers and told reporters in 2016 that he didn’t see the still-the-works AT&T deal as “a major antitrust problem.” But he eventually decided the merger would cause cable subscription costs to rise for consumers and would stifle the development of new streaming services. The DOJ’s arguments in court relied heavily on hypothetical estimates for the rise in cable bill costs that didn’t stand up under cross-examination.
There’s plenty of reason to believe this deal will have consequences that harm consumers in the long run. In the short-term, the failure of the DOJ to make its case is expected to set off a race for giant corporations to seek their own mergers that will shrink the number of players in the media landscape. We’ve already seen a newly emboldened Comcast move forward with its bid to buy 21st Century Fox for $65 billion.
The DOJ still has 60 days to appeal the court’s decision. A spokesperson for the department told CNN that the move not to seek an injunction for the deal did not mean the DOJ has made a decision about the appeal. The department is “still evaluating options,” they said.