The Justice Department will appeal the AT&T-Warner merger approved by a court ruling, as was indicated in a court document on Thursday.
Judge Richard Leon ruled last month that the government has not shown the $85.4 billion merger is in violation with antitrust law, imposing no conditions on the deal and ripping apart the DOJ’s lawsuit aimed at blocking the deal, CNN reports.
At the time, the Justice Department argued that AT&T, which owns HBO, CNN and Warner Bros, would cause an increase in prices damaging to consumers, competition and innovation. “The Government has failed to meet its burden of proof to show that the merger is likely to result in a substantial lessening of competition,” the judge wrote in his ruling.
The case will now go to the D.C. Circuit Court of Appeals, where a three-judge panel will hear the appeal. It could eventually end up in front of the Supreme Court, but this is not very likely.
Leon also warned the government against using a stay to postpone the deal’s completion, and the Justice Department ultimately decided against filing to delay the closing of the deal, which was completed within days of the favorable ruling.
Craig Moffett of Moffett-Nathanson told CNBC’s “Fast Money” that given how decisive Leon’s ruling was, there aren’t a lot of obvious arguments the government can make for its appeal.
Since Thursday’s announcement AT&T’s shares fell over 1 percent and the company’s General Counsel David McAtee said AT&T was surprised by the appeal.
“The Court’s decision could hardly have been more thorough, fact-based, and well-reasoned. 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,” McAtee said in a statement. “We are ready to defend the Court’s decision at the D.C. Circuit Court of Appeals.”
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