Having failed to block AT&T’s takeover of Time Warner, the U.S. Department of Justice is now trying to unravel the $85 billion deal.
A month after a federal judge rejected the government’s argument that the agreement would harm competition and consumers, the DoJ on Thursday filed a notice of appeal — the first step in what could be a protracted appellate process.
The appeal, if successful, would require a breakup of the deal. The government had declined to seek a stay to block the merger as it pursued an appeal and AT&T moved quickly to consummate the long-delayed deal.
AT&T General Counsel David McAtee expressed surprise that the government had decided to appeal.
“The court’s decision could hardly have been more thorough, fact-based, and well-reasoned,” he said in a statement. “While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DOJ has chosen to do so under these circumstances.”
The trial of the DoJ’s antitrust suit was the first involving a “vertical” merger — with AT&T’s distribution meshing with Time Warner’s content operations — in several decades.
“The latest legal maneuvering will not immediately change the business,” The New York Times said. “But if the Justice Department ultimately prevails in its appeal, AT&T would have to detach the Time Warner business, now renamed Warner Media.”
Legal experts interviewed by the Times were skeptical of the department’s chances. But Gene Kimmelman, president of Public Knowledge and a former senior antitrust official at the DoJ, said the government’s intention may not ultimately be to win a court appeal.
“It signals to the market the government isn’t throwing in the towel,” he said.
Variety noted that public interest groups and some congressional lawmakers had urged the government to appeal. “The DoJ has been pressing [Judge Richard] Leon to publicly release the transcripts of many of the sidebar conferences he had with lawyers on both sides, which has raised some speculation that the government will raise issues over some of the judge’s evidentiary rulings,” it said.