Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: AT&T completes acquisition of Time Warner, agrees to, (Jun 15, 2018)

AT&T Inc. has completed its acquisition of Time Warner Inc. The move comes after the federal district court in Washington, D.C. denied a Department of Justice Antitrust Division request to block the deal on June 12. The court also eliminated a waiting period imposed on the transaction while the government challenge was pending, in light of an agreement between the Justice Department and the merger partners.

The Justice Department joined AT&T and TWI in a filing yesterday, seeking the removal of the waiting-period provision in light of commitments from AT&T to "manage the Turner networks as part of a separate business unit, distinct from the operations of AT&T Communications, which includes AT&T’s DIRECTV and U-verse businesses."

AT&T also committed that "AT&T Communications will have no role in setting Turner’s prices or other terms to unaffiliated distributors, and Turner will not consult with AT&T Communications in setting Turner prices or other terms for programming provided to unaffiliated video distributors."

AT&T committed that "[t]arget compensation levels and benefits for Turner personnel will remain largely unchanged, as will the number of Turner employees."

Finally, it said that it would "implement a firewall between Turner and AT&T Communications to prevent the transmission or exchange, either directly or indirectly, of competitively sensitive information of unaffiliated programmers or distributors. For the purposes of the foregoing," it said, "‘competitively sensitive information’ means any non-public information relating to contract terms, pricing, or negotiations."

AT&T said the commitments would remain in force "until the earlier of February 28, 2019 or the conclusion of this case or any appeal by the Department of Justice."

In light of those commitments, the Justice Department agreed to forego its option to seek a stay pending appeal or to object to the removal of the waiting-period provision so that the merger can close "as soon as possible, including later this week," AT&T said in a letter to the Justice Department filed with the court along with the joint motion to eliminate the waiting-period provision.

The court had warned the Justice Department not to seek a stay, saying that it would be rejected. However, the door was left open for an appeal. On the day that the decision was handed down, Makan Delrahim, Assistant Attorney General in charge of the Department of Justice Antitrust Division, has said that the agency is considering its options with respect to appeal.

In remarks to attendees of the Chicago Forum on International Antitrust Issues yesterday, Donald G. Kempf, Jr., Deputy Assistant Attorney General for Litigation at the Antitrust Division, expressed his concerns with the impact of the decision on vertical merger enforcement, particularly the court’s characterizations of the dynamic and changing marketplace. Kempf pointed out that there were "a whole string of transactions" in the media and telecommunications industry that will be coming up for review. His remarks suggested that he would recommend appeal; however, he would not comment.

Companies: AT&T Inc.; DIRECTV Group Holdings, LLC; Time Warner Inc.

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