The merger between AT&T and Time Warner approved in appeal

La fusion entre AT&T et Time Warner validée en appel

Photo: Drew Angerer Getty images AFP
The government Trump was opposed to the rapprochement between the two companies, effective since mid-June.

The american justice has validated Tuesday to appeal the acquisition of the media group Time Warner by the operator AT&T, a blow to the government’s Trump, which opposed the merger, effective since mid-June.

The Court of appeal has, in particular, rejected the government’s arguments that the merger could have adverse consequences for consumers, considering that they were not sufficiently substantiated.

The action of the federal authorities against this merger had been interpreted by some as being motivated ideologically by the hostility of Donald Trump with respect to Time Warner in general and in respect of its subsidiary CNN in particular. According to the government Trump, this “vertical” amalgamation between a producer of content, Time Warner, and a distributor of content, AT&T, gives the new set more negotiating power with other distributors interested in its contents.

But AT&T has produced studies showing that the purchase of NBC Universal by Comcast, in 2011, had no material effect on the price. In its opinion, written by judge Judith Rogers, the Court of appeals for the federal circuit of Washington has also mentioned the emergence of platforms of video on demand like Netflix or Hulu that had “energized” the area, making it more competitive.

The union between AT&T and Time Warner was intended to do so in the face of competition from Netflix, similar to the operations carried out by Comcast, but also Disney (which bought the main asset of Fox). Disney, AT&T, but also Apple all want to start their own broadcast platform, to master both the content and their distribution directly to consumers, like Netflix.

This strategic realignment is all the more imperative for AT&T that his colossal investment in the satellite television service DirecTV, which was acquired in 2015 for $ 49 billion, turns out to be a failure. The evolution of the current practices of younger consumers will as well to platforms or services directly over the Internet, without the use of a bouquet by satellite or by cable.

Announced at the end of October 2016, the acquisition of Time Warner by AT&T, for $ 85 billion, had been challenged by the u.s. government and then validated for the first time, on June 12, 2018, by a federal judge in Washington. The government Trump had then appealed, but the procedure was not suspensive and the merger has been finalized in June. AT&T has already released the last two quarterly results with the new group in its configuration unified.

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