AT&T And Time Warner Merger Approved By Judges

A federal judge ruled in favor of the merger between AT&T and Time Warner for $85 billion on June 12, with much bigger implications than many initially thought.

Lets break it down for you, Time Warner owns seven content creators including CNN, TBS, TNT, HBO, Warner Brothers Pictures. This is giving many consumer advocacy groups worry with the thought that the deal would give too much advantage to AT&T (second largest wireless carrier in the U.S.).

This means that AT&T could use their cellular and broadband platforms to reach consumers, profiting off their new Time Warner content, HBO subscription fees, ad revenue from TNT, DC comics sales, and Warner Brothers distribution rights. The Department of Justice decided to file a lawsuit against AT&T in November 2017, citing the reason that this deal was “too anti-competitive” and placing prices on consumers, as well as AT&T rivals.

This case is seen as one of the biggest anti-trust cases in decades, so what is the biggest impact from this ruling? Some think this may discourage law-makers from regulating businesses, which will lead to more mergers with companies that operate in different industries.

This is also resulting in an influx of cross-industry acquisitions, such as Verizon purchasing AOL and Yahoo. Another large cross-industry acquisition that is everywhere in the news is the buy-out of Whole Foods by Amazon.

Time Warner isn’t the only big name in the entertainment industry that is acquiring new businesses, with Comcast gearing up to fight Disney for control over 20th Century Fox. These acquisition cases also come at a time after the recent repeal of net neutrality by the FCC.

Since internet providers are able to prioritize their content over their competition, with a new business model forming. This new model involves internet companies buying other companies that it can later use to profit from with ads and content distribution.

President Trump opposed this deal in the past citing ‘there is too much concentration of power between few people’ so he is likely to not provide AT&T with help. As for the Justice Department, will most likely appeal this decision and forcing an extension to the June 18 closing date that AT&T and Time Warner were supposed to meet.

Time Warner can demand additional payment from AT&T, but it is unknown whether the appeal will actually effect the outcome of this ruling.

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6 years ago