D.C. Circuit Court of Appeals allowed the merger between Time Warner® and AT&T® to go through, saying it was the rule of the marketplace. This was, in other words, a verdict against the government, which had disagreed with the proceedings in this agreement. They claimed that this was an act where one future company benefitted at the cost of existing customers. The decision has put the agreement looming on the horizon, and now we have a merger that is valued at around $105 billion. The courts shut down the government’s argument that this would allow Turner Broadcasting a superior position, which was against the antitrust law.
The court called the merger between the wireless provider, AT&T® and Time Warner®, as a need of the hour, and not merely as mongering for advantage. There are already a number of companies with huge customer bases including the likes of Facebook, Netflix, Amazon®, and Apple. In order to stay shoulder to shoulder with these giants, AT&T® has to offer high-quality content. This translates to a need for more content and a higher degree of freedom for customers. Besides, the coalition appears to be an opportunistic one, and is headed in a direction quite different from the culture popularized by Amazon®. The team-up is said to have the potential to diminish the imbalance favoring Amazon®. In case the customers of Time Warner® are left with lesser channels and higher pay, there would be more power to the subscribers who will cancel their subscriptions. Further, they will find similar content online at lower rates.
“The merger of these innovative companies has already yielded significant consumer benefits, and it will continue to do so for years to come,” said McAtee in the aftermath of the verdict announcement. “While we respect the important role that the U.S. Department of Justice plays in the merger review process, we trust that today’s unanimous decision from the D.C. Circuit will end this litigation.” The coming together of the nation’s best internet provider and Time Warner®, is a step that reinforces the news and entertainment industry. It is not in agreement with the greedy corporate practices of hiking costs and imposing content restrictions.