Roadblock For AT&T's Time Warner Deal
The Department of Justice this week said that the district judge presiding over the case to determine the fate of AT&T's planned acquisition of Time Warner didn't understand that the combined company could harm competition and hike up prices for customers. The DOJ, in an 86-page document, explained its reason for appealing the case is that U.S. District Court Judge Richard Leon in his ruling ignored "mainstream economics."
"The court reached this ultimate finding only by rejecting fundamental logic and the economics of bargaining it purported to accept. … A remand is necessary, therefore, to determine under the correct analysis whether the merger violates Section 7," the DOJ wrote. The DOJ was referencing Section 7 of the Clayton Act that prohibits the acquisitions of stock or of assets should such an acquisition substantially lessen competition or move to create a monopoly.