The US Department of Justice (DOJ) on Thursday said that it would appeal a federal judge’s approval of AT&T Inc’s US$85.4 billion acquisition of Time Warner, raising the prospect barely a month after the deal closed that it could be undone.
AT&T was sued by the department on antitrust grounds, saying that the deal would harm consumers, but US District Judge Richard Leon last month approved the deal, allowing it to move forward following a lengthy trial.
The merger, first announced in October 2016, was also opposed by US President Donald Trump.
Leon ruled that the tie-up between AT&T’s wireless and satellite businesses with Time Warner’s movies and television shows was legal under antitrust law.
AT&T chief executive Randall Stephenson told reporters on Thursday at a conference in Sun Valley, Idaho, that the company was not surprised about the department’s decision to appeal.
“They have the right to appeal. Everyone has the right to appeal. We have a very fact-based thoughtful order. It will be evaluated on those grounds,” he said.
The department last month opted not to seek an immediate stay of the court’s approval of the merger, allowing the deal to close on June 14.
However, it still had 60 days to appeal the decision approving the merger.
The government’s notice of appeal filed in US District Court in Washington did not disclose on what grounds it intends to challenge the approval.
The department could challenge Leon’s analysis of the facts of the case, the economic arguments given or what Carrier described as an apparent pro-defendant approach by the judge, said Michael Carrier, an antitrust expert at Rutgers University.
Leon had sharply urged the department not to seek a stay of his ruling, saying it would be “manifestly unjust” to do so and not likely to succeed.
In his ruling, he said the government had failed to show competitive harm.
John Bergmayer, senior counsel at advocacy group Public Knowledge, said that since the deal was approved, AT&T had raised prices for some video and wireless services.
“The AT&T-Time Warner transaction is a bad deal for consumers and competition,” he said. “Judge Leon’s decision contained numerous errors, and we believe the DOJ’s position should be vindicated.”
Deals approved by a federal judge have been undone on appeal in the past.
In 2001, H.J. Heinz Co called off its acquisition of Beech-Nut after an appeals court overturned a lower court’s decision to allow the merger.
The Federal Trade Commission had argued the deal would have merged the No. 2 and No. 3 baby food makers and that competition would be “lessened substantially” if it were to go forward.
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