The Editorial Board of the Wall Street Journal calls AT&T’s defeat of the Department of Justice over its acquisition of Time Warner a “stone cold knockout.” The Justice Department sued AT&T to block its acquisition over carriage-fees, but failed miserably, with the D.C. Circuit Court of Appeals writing a 127-page opinion rebutting the DOJ’s position. The Board writes:
The three-judge appellate panel comprised of two Democratic appointees largely agreed, notwithstanding some nits with Judge Leon’s legal diction. As is its custom, the D.C. Circuit judges reviewed the trial court ruling for “clearly erroneous” misstatement of facts, and they did identify misrepresentations by the government.
For instance, Judge Judith Rodgers noted the government ignored that Turner Broadcasting had “sent letters to approximately 1,000 distributors ‘irrevocably offering’ to engage in ‘baseball style’ arbitration at any time within a seven-year period.” This would prevent an AT&T monopoly over content. The government’s models also did not take into account long-term network contracts, “which would constrain Turner Broadcasting’s ability to raise content prices for distributors,” she wrote.
We repeatedly advised Justice to drop the suit, and the Trump Administration should be glad the D.C. Circuit’s liberals didn’t take up the opportunity to rewrite antitrust law along European lines as some on the left urged. Rather than suffer another humiliation at the Supreme Court, the antitrust cops should drop the case and consider why they lost so thoroughly.
Read more here.
Jeremy Jones, CFA
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