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Federal judge approves $85 billion deal in which AT&T buys Time Warner



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A federal judge has approved an $85 billion merger between AT&T and Time Warner. Photo courtesy of Tribune News Service Buy Photos

A deal bringing together AT&T's distribution system of satellites and cell phones with the selection of TV shows and movies offered by Time Warner has finally been approved by a federal judge after the U.S. Justice Department attempted to stop the deal in court. 

The content creation and distribution systems of the two companies will now have the chance to be joined together.

The deal was first announced in October 2016, followed by a suit by the Justice Department in November 2017.

In his ruling, Judge Richard Leon wrote the Justice Department, and, in turn, the U.S. Government, believed AT&T buying Time Warner would substantially harm competition and might limit access to programming like HBO or increase prices for customers. 

On the other hand, Time Warner and AT&T argued the deal was necessary to compete with companies like Netflix, Hulu and Amazon, which have used the internet to provide high-quality shows and movies directly to the consumer. 

AT&T and Time Warner need to change, the companies argued.

Judge Leon agreed with their vision of the media marketplace, and claimed the government had failed to provide sufficient proof the two companies would coordinate in order to raise prices and gouge customers for more money.

"Accordingly, I reject outright the assertion that the combined entity would likely restrict HBO as a promotional tool in order to harm distribution rivals and thereby lessen competition in the marketplace," he wrote in his ruling. 

Leon refused to listen to the Justice Department's request for a stay on his ruling so they could appeal. He wrote such a stay would be "a manifestly unjust outcome in this case."

"I hope and trust that the Government will have the good judgment, wisdom and courage to avoid such a manifest injustice," Leon wrote. "To do otherwise, I fear, would undermine the faith in our system of justice of not only the defendants, but their millions of shareholders and the business community at large. Thus, for all of the foregoing reasons, the Government's request to enjoin the proposed merger is DENIED."

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