AT&T and Time Warner have completed their merger, after a federal judge ruled against an attempt made by Department of Justice (DOJ) to block the deal. After the ruling, DOJ had an option to appeal, but they not to seek an injunction at this time.
The judge ruled that the DOJ did not argue satisfactorily about how it would harm customers. It was agreed that he DOJ would be given six days to request an injunction. This six days time limit was decided based on an agreement between the companies where AT&T will pay Time Warner a $500 million “reverse termination fee” if the deal wasn’t closed by June 21.
With the inclusion of Warner Bros, HBO, and Turner under its umbrella, AT&T will “bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers,” AT&T CEO Randall Stephenson said in the merger completion announcement. “AT&T will offer customers a differentiated, high-quality, mobile-first entertainment experience.”
The DOJ decided not to request a stay on the ruling after AT&T said it would maintain a certain amount of separation between its old and new business units.
“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 said in a letter to the DOJ yesterday. AT&T also said it “will 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.”
Currently, the Department of Justice has 60 days to appeal the court’s decision. According to a spokesperson for the DOJ, the decision to not seek injunction at this point does not mean that the DOJ has made their final decision about the deal. The department is “still evaluating options.”