(Bloomberg) -- AT&T Inc. defended a court ruling approving its takeover of Time Warner, saying a U.S. appeal of the decision is based on “narrow and fragile” claims properly rejected by the trial judge.
The Justice Department failed to show that the lower-court judge who approved the $85 billion merger made a "clear error" when he rejected the government's case that the deal would lead to higher prices for pay-TV subscribers, AT&T said in a court filing Thursday in Washington.
"DOJ's burden is not simply to describe an economic theory," AT&T's lawyers said in response to the government's argument. "DOJ had to prove, with facts, that the theory fits the relevant industry setting and that proper application of the theory demonstrates a likelihood of substantial competitive harm. DOJ failed in both respects."
Click here for more on why the U.S. argues to overturn the AT&T deal ruling
The Justice Department's antitrust division has asked the U.S. Court of Appeals in Washington to reverse this year's ruling by U.S. District Judge Richard Leon. The department says the decision was wrong in part because Leon ignored the core argument that Time Warner would have added bargaining power over rival pay-TV distributors that pay for its programming.
Leon's decision was a stinging rebuke to the government and the division's chief, Makan Delrahim, who broke new ground by going to trial to stop a deal that united companies in different parts of an industry supply chain -- in this case, AT&T's distribution network and Time Warner's content.
The government said the appeals court decision “will shape the future of the media and telecommunications industries for years to come" by setting guidelines for deciding whether content companies and distributors can combine.
The case is U.S. v. AT&T Inc., 18-5214, U.S. Court of Appeals for the District of Columbia.
To contact the reporter on this story: David McLaughlin in Washington at dmclaughlin9@bloomberg.net
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Joe Schneider
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