U.S. DoJ Says Ruling Approving AT&T-Time Warner Merger Ignored 'Fundamental Principles of Economics and Common Sense'

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The U.S. Department of Justice today filed an appeal with the District of Columbia Appeals Court protesting the June ruling that allowed the merger between AT&T and Time Warner to move forward, reports The Washington Post.

In the filing, the DoJ says the district court approved the merger after "erroneously ignoring fundamental principles of economics and common sense" and that it used a "deeply flawed assessment of the government's evidence" to reach its decision.


According to the DoJ, AT&T's access to Time Warner's content, including the highly important Turner Broadcasting System, which includes CNN, Cartoon Network, TBS, TNT, and other networks, gives it bargaining leverage over rivals, which could drive up access fees, ultimately resulting in higher prices for consumers.

The original ruling approving the merger, says the DoJ, ignored key documents from AT&T on the competitive harm of vertical mergers, limited expert economic testimony, and refused to close the courtroom to allow for testimony related to confidential business information. Further, the DoJ insists the original ruling ignored the economics of bargaining and did not consider corporate profit maximization.
The government established a reasonable probability that the AT&T-Time Warner merger would increase Time Warner's bargaining leverage and, thus, substantially lessen competition, in violation of Section 7 of the Clayton Act.

The district court's contrary conclusion rests on two fundamental analytical errors: it discarded the economics of bargaining, and it failed to apply the foundational principle of corporate-wide profit maximization. These errors colored the court's view of the facts, leading to a decision that is clearly erroneous in light of the evidence presented at trial.
The Department of Justice is asking the appeals court to vacate the district court's ruling and remand the matter for further proceedings.

AT&T and Time Warner completed their merger in June following the judge's ruling that the merger was legal. The Justice Department said at the time that it was disappointed in the court's ruling and would consider its next steps, but allowed the merger to move forward and did not file an emergency stay.

While the merger is finished, the Department of Justice remains able to appeal the judge's ruling and first announced plans to do so back in mid-July.

Shortly after acquiring Time Warner, AT&T announced a new WatchTV service allowing AT&T wireless subscribers with new "AT&T Unlimited &More" and "AT&T Unlimited &More Premium" plans access to more than 30 live channels and 15,000 TV shows and movies on demand.

AT&T's plans are more expensive than previous unlimited wireless plans, but they include WatchTV, which AT&T charges $15 per month for on a standalone basis.

Though AT&T said that its prices would not increase following the merger, it raised prices on its DirecTV Now plans by $5. AT&T also recently raised its administrative fees for postpaid wireless subscribers to $1.99, which some analysts have speculated is to make up for the expense of the Time Warner purchase.

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Article Link: U.S. DoJ Says Ruling Approving AT&T-Time Warner Merger Ignored 'Fundamental Principles of Economics and Common Sense'
 

aka777

macrumors 6502a
Mar 13, 2012
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Government protecting consumers. That’s a good one. All their unnecessary regulations causes prices on everything to be tremendously higher than they should be in the first place.

This deal would be blocked in pretty much any other developed country. It's just interesting that free market capitalist types don't seem to grasp the core fundamentals of Capitalism, which is competition. Monopolies and Super-Corporations go against the core principle of Capitalism.

Also, with the exception of America, every single developed country has government bodies looking out for their We the People. The success of this is why today, 19 of the top 20 economies on the planet are Big Gov types.

We can also break this down on a state level, as almost all of the bottom 20 states for GDP per capita, wealth per capita, home prices, incomes, quality of life, poverty, education etc are No Gov Red States. Whereas, the majority of the top 20 states for the above are Big Gov Blue States. Ironically, the biggest welfare recipient states in the Union are also No Gov Red states.
 

KGBguy

Suspended
Feb 19, 2015
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Oh, I’m so greatful to my government for my protection. I do not know how I could live without it.

Seig Heil, the US government!

‍♂
 
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ActionableMango

macrumors G3
Sep 21, 2010
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This deal would be blocked in pretty much any other developed country. It's just interesting that free market capitalist types don't seem to grasp the core fundamentals of Capitalism, which is competition. Monopolies and Super-Corporations go against the core principle of Capitalism.
There is plenty of competition to AT&T/DirectTV.

For TV there is free over-the-air antenna, all the cable companies, FIOS, DISH, Amazon, Netflix, Hulu, Sling, iTunes, FandangoNow, VUDU, Crackle, Google Play, Yahoo, Playstation, Microsoft, and even multiple disc-based services.

There is also plenty of cell phone competition. Four nationwide networks AT&T, Verizon, Sprint, and T-Mobile, plus some regional networks like US Cellular, and dozens or hundreds of MVNOs using those networks. Right here in these forums there are plenty of people switching between the carriers all the time. It takes tens of billions of dollars to build a nationwide cellular network, so how many companies do you expect to do that and be able to compete? 5? 6? 15? I'm not even sure 4 is sustainable...Sprint isn't looking too good.

Also, with the exception of America, every single developed country has government bodies looking out for their We the People.
Oh really.
 

coumerelli

macrumors 6502
Apr 7, 2003
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state of confusion.
“the DoJ says the district court approved the merger after "erroneously ignoring fundamental principles of economics and common sense" and that it used a "deeply flawed assessment of the government's evidence" to reach its decision.”

Hear! Hear!
 

Princejb134

macrumors 6502
Jul 22, 2012
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There is plenty of competition to AT&T/DirectTV.

For TV there is free over-the-air antenna, all the cable companies, FIOS, DISH, Amazon, Netflix, Hulu, Sling, iTunes, FandangoNow, VUDU, Crackle, Google Play, Yahoo, Playstation, Microsoft, and even multiple disc-based services.

There is also plenty of cell phone competition. Four nationwide networks AT&T, Verizon, Sprint, and T-Mobile, plus some regional networks like US Cellular, and dozens or hundreds of MVNOs using those networks. Right here in these forums there are plenty of people switching between the carriers all the time. It takes tens of billions of dollars to build a nationwide cellular network, so how many companies do you expect to do that and be able to compete? 5? 6? 15? I'm not even sure 4 is sustainable...Sprint isn't looking too good.



Oh really.
Yup but there ain't no competition when it comes to internet access. Netflix and Hulu is only a cheap alternative if you don't pay high prices for internet.
Knowing Atnt and its selfish history. They will definitely raise prices
 

WarHeadz

macrumors 6502a
Aug 30, 2015
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Wow...the DOJ actually doing it’s job. I wonder what the ulterior motive is. Someone at AT&T must have pissed off someone in this administration.
[doublepost=1533601348][/doublepost]
Yup but there ain't no competition when it comes to internet access. Netflix and Hulu is only a cheap alternative if you don't pay high prices for internet.
Knowing Atnt and its selfish history. They will definitely raise prices
Competition with Internet will come when the cellular infrastructure could support unlimited home broadband for millions of people simultaneously. The reason there’s no completion now is because of who owns the fiber optic cable in the ground.
 

Cigsm

macrumors 6502a
Jan 22, 2010
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Lol that’s so cute you think businesses aren’t in business to make as much money as possible and absolutely certainly wouldn’t do everything possible to make every dollar they can.

It’s even cuter you made that comment on an article stating AT&T told the government the merger wouldn’t raise rates and then a month after it was approved they raised rates.

Government protecting consumers. That’s a good one. All their unnecessary regulations causes prices on everything to be tremendously higher than they should be in the first place.
 

Princejb134

macrumors 6502
Jul 22, 2012
264
297
Wow...the DOJ actually doing it’s job. I wonder what the ulterior motive is. Someone at AT&T must have pissed off someone in this administration.
[doublepost=1533601348][/doublepost]
Competition with Internet will come when the cellular infrastructure could support unlimited home broadband for millions of people simultaneously. The reason there’s no completion now is because of who owns the fiber optic cable in the ground.
How do you know? To built anything you need money let alone internet service where you'll need billions and the right towers to implement
 

2010mini

macrumors 601
Jun 19, 2013
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Oh for crap’s sake! This isn’t a monopoly. This merger will not vacate existing rebroadcasting rights. AT&T will not be able to block competitors from rebroadcasting TWI library of content.
 
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aka777

macrumors 6502a
Mar 13, 2012
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There is plenty of competition to AT&T/DirectTV.
They're actually purchasing the content side with this deal. They're not buying TWC. That means that AT&T will be in control of the distribution, which can and will affect all of the services that you listed.

There is also plenty of cell phone competition.
Not in America, we are about to drop to 3 carriers, which hardly counts as plenty. The largest two American carriers essentially only compete superficially anyway, which is why the American wireless market is ranked as offering one of the worst value in the developed world.

Perhaps you're thinking of Europe or Asia.

Why Canadian cell phone bills are among the most expensive on the planet
They only have 3 carriers.

Canadians Get Some Of World’s Worst Deals On Wireless Data, Study Finds
We basically rank the 2nd worst. We also rank extremely poorly for wireless speeds.

How Did Australia End Up With Such Ridiculously Slow Internet? Australia Internet slower than Kenya
That's disingenuous as the Aussies are building a $50 Billion dollar nationwide wholesale broadband network that allows for any number of competitors. It's pretty much a world first.

Now compare this to the majority of America, which barely has one broadband option. In most American cities, I had a choice of either cable or DSL. I had a good 6+ ADSL 2 options to chose from in Australia + 2 cable networks. Their Mobile networks also rank highly for speed.
 

fairuz

macrumors 68020
Aug 27, 2017
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CNN, Cartoon Network, TBS, TNT, and other networks
I don't care about this cause TV sucks anyway. Only care that they leave the Internet as it is so original content there can continue to flourish.

I just discovered a family member's ISP was doing some traffic shaping, where Google worked fine while other sites like neverssl.com didn't load. We're going to see more and more of this BS now that there aren't laws protecting net neutrality.
 
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Diode

macrumors 68020
Apr 15, 2004
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There is plenty of competition to AT&T/DirectTV.

For TV there is free over-the-air antenna, all the cable companies, FIOS, DISH, Amazon, Netflix, Hulu, Sling, iTunes, FandangoNow, VUDU, Crackle, Google Play, Yahoo, Playstation, Microsoft, and even multiple disc-based services.

There is also plenty of cell phone competition. Four nationwide networks AT&T, Verizon, Sprint, and T-Mobile, plus some regional networks like US Cellular, and dozens or hundreds of MVNOs using those networks.
Huh? Did we read the same article. This is not about Hulu and the like. It’s about where those services buy their content from. All it takes is Time Warner (TBS, CNN etc) raising prices for Hulu, Netflix etc to stream their content and it will pass on to consumers.

Same with cell phones - a t-mobile / Sprint merger is on the horizon and you can kiss MVNO deals good bye.
 

fairuz

macrumors 68020
Aug 27, 2017
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Silicon Valley
Also, with the exception of America, every single developed country has government bodies looking out for their We the People. The success of this is why today, 19 of the top 20 economies on the planet are Big Gov types.
Except the US is the top one, and you either left out China, Russia, and Japan or counted them as "big gov." And the reason the other developed countries are kinda socialist is that they're developed, not the other way around. Poor countries can't even afford to be socialist.

Also, we're talking about modern tech, most of which the US created for these European countries (I assume you're referring to). Europe has been slowing its own progress for decades with short-sighted regulations, often through the EU. At this point most would consider the tech ranking to be something like: US, then Japan, then Israel, then China and Russia and India, then Europe. IDK much about Canada but am guessing they're also in there above Europe. Expect some eastern Europe and maybe even Middle East countries to jump ahead of western Europe soon.
[doublepost=1533610678][/doublepost]
Huh? Did we read the same article. This is not about Hulu and the like. It’s about where those services buy their content from. All it takes is Time Warner (TBS, CNN etc) raising prices for Hulu, Netflix etc to stream their content and it will pass on to consumers.

Same with cell phones - a t-mobile / Sprint merger is on the horizon and you can kiss MVNO deals good bye.
That's why everyone is making original content now, even Apple. I don't think it's possible to have a monopoly on original content [edit:] unless it's forced by ISP restrictions due to ISP mergers.
[doublepost=1533611269][/doublepost]
Competition with Internet will come when the cellular infrastructure could support unlimited home broadband for millions of people simultaneously. The reason there’s no completion now is because of who owns the fiber optic cable in the ground.
Cell towers need fiber. The kind of competition you describe requires some kind of new long-ranged wireless internet, which if anything we're moving away from with the high-freq, short-range 5G tech. I think regulation is the only solution here, which is something I rarely say.
[doublepost=1533611450][/doublepost]
Lol that’s so cute you think businesses aren’t in business to make as much money as possible and absolutely certainly wouldn’t do everything possible to make every dollar they can.

It’s even cuter you made that comment on an article stating AT&T told the government the merger wouldn’t raise rates and then a month after it was approved they raised rates.
Which includes competing with other businesses, which helps the consumers. There are anticompetitive practices that can cause issues there, but you stated an absolute and didn't mention that. Also it's against the rules to demean other members here.
 
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supercoolmanchu

macrumors 6502
Mar 5, 2012
261
431
Hollywood
The DoJ changed their mind after they heard ATT was gonna mess with HBO.
Let’s face it, HBO is an empty vessel after they air the last Game of Thrones season.

Not many tears would be shed for Westworld. The rest is just an archive of dry, unremarkable lite comedy and instantly dated political commentary.

Their ‘trump’ card was high tv production value, but the streaming services have been stealing that thunder. Without a breakout hit or some huge turnaround move, the writing is on the wall for HBO. They are falling towards being a mid tier cable channel, but with a drastically higher overhead than their competition. Their current business is unsustainable, if this AT&T merger doesn’t happen, HBO is likely headed towards a major reshuffle anyways.
 
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inkahauts

macrumors regular
Sep 7, 2014
222
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Huh? Did we read the same article. This is not about Hulu and the like. It’s about where those services buy their content from. All it takes is Time Warner (TBS, CNN etc) raising prices for Hulu, Netflix etc to stream their content and it will pass on to consumers.

Same with cell phones - a t-mobile / Sprint merger is on the horizon and you can kiss MVNO deals good bye.
You aren’t paying attention if you are worried about that. Streaming is splintering like crazy. Netflix won’t even bother with a tnt show if it gets to high in price, their long term plan is their own content mixed in with others content that is riced at a point they find profitable. And that’s where everyone is headed. It’s not like you should ever expect to see Star Trek on anything other than CBS streaming in the US. Disney will all be on Disney’s new service. How long before HBO go is all Warner stuff? And don’t worry I am sure Comcast has plans for a full NBC universal str among service to keep all their content at exclusively. That is all happening with or without this merger. This merger just makes it easier for Warner to survive without merging with say, paramount or some other big studio...