WASHINGTON (Reuters) - AT&T Inc scored a key win on Tuesday when a U.S. appeals court rejected the Trump administration’s argument that its $85.4 billion deal to buy media company Time Warner would mean higher consumer prices.
The Justice Department had asked the court to declare the deal illegal, arguing that AT&T, which owns DirecTV, would use ownership of Time Warner’s content, such as CNN and HBO’s “Game of Thrones,” to make pay-TV rivals pay more or risk a blackout, thus raising prices for consumers by about 45 cents per month.
AT&T argued that prices would not rise because it had a financial incentive to avoid blackouts by licensing its content broadly to collect fees and advertising.
The deal had been closely watched in political circles after coming under fire from U.S. President Donald Trump, who opposed it because he saw it helping Time Warner’s CNN unit, which he has accused of broadcasting “fake news.”
The three-judge panel on the U.S. Court of Appeals for the District of Columbia ruled unanimously in favor of the deal, saying that the government’s case was “unpersuasive.” The decision could end a 15-month effort by the Justice Department to block it.
It was AT&T’s second major court victory against the Justice Department, setting the stage for the No. 2 wireless carrier to integrate its WarnerMedia business as well as its new Xandr advertising unit, as it transforms into a media company.
The deal has also been seen as a turning point for a media industry that has been upended by companies like Netflix Inc and Alphabet Inc’s Google which put content online with no need for a cable subscription.
The appeals court ruling, following an AT&T win in district court, meant that the Justice Department was unlikely
