United States v. AT&T, Inc.
United States District Court for the District of Columbia
310 F. Supp. 3d 161 (2018)
- Written by Angela Patrick, JD
Facts
Time Warner, Inc. (defendant) created video-programming content, such as content for its Turner and HBO networks. AT&T, Inc. (defendant) distributed video-programming content. Both companies faced heavy competition from vertically integrated companies that both created and distributed content, like Netflix and Hulu. To compete more effectively, Time Warner and AT&T proposed a vertical merger. The federal government (plaintiff) sued to enjoin or prevent the merger under § 7 of the Clayton Act. The government claimed that the merger would harm competition because the merged entity could: (1) use its leverage to charge other distributors higher fees for Time Warner’s content; (2) slow the growth of new, online-subscription competitors by denying them access to Time Warner’s popular content or coordinating with Comcast-NBCU, a competing vertically merged entity; and (3) harm existing distributors by preventing them from using the HBO network as a promotional tool. At trial, the government conceded that the merger would reduce the cost of AT&T’s services. The merging parties presented evidence that prior vertical mergers in the industry had not led to higher content fees and that Time Warner’s revenues increased as its content distribution increased.
Rule of Law
Issue
Holding and Reasoning (Leon, J.)
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