WASHINGTON (Reuters) – Attorneys at the US Department of Justice and AT & T ( TN ) will be closing arguments in a lawsuit on Monday to determine if the wireless giant, owner of pay-TV The provider DirecTV, will be allowed to buy movie and television show maker Time Warner ( TWX.N ).
The Department of Justice sued the $ 85 billion agreement and said it would pay higher prices for competing TV companies lead.
The government has argued that AT & T views the merger as a way to persuade viewers to stay on pay-TV instead of switching to cheaper online providers, citing a report in which an AT T & T manager said, Time Warner to buy AT & T slows down the decline in pay-TV subscriptions, which were referred to as "Cash Cow".
AT & T's satellite television service DirecTV lost 187,000 traditional US video customers in the first quarter of 2018.
The judge's decision, expected in several weeks, will give dealmakers an idea of how aggressive they can be when buying suppliers, which is known as a vertical merger under antitrust law. Until then, vertical closures have been widely accepted by regulators as being eligible.
Two key witnesses to the trial were AT & T CEO Randall Stephenson and Time Warner CEO Jeff Bewkes, who will retire when the transaction is completed.
The two executives argued that blending AT & T's detailed information about customers with Time Warner's ability to produce compelling video would enable more effective advertising and give the merged company a chance, with titans like Facebook and Google compete.
They also denounced the idea that AT & T would reluctantly license Time Warner content such as CNN or March Madness Basketball to other pay-TV competitors or to cheaper online video companies, as "ridiculous" and "absurd" – a decisive government argument.
Hoping to prevent litigation, AT & T suggested that they settle disputes with distributors for seven years on pricing for Time Warner networks and promise not to obscure programming during arbitration.
But smaller pay-TV rivals, known as government witnesses, argued that this was inappropriate. Warren Schlichting, Dish Network Group President ( DISH.O ) Sling TV, argued that AT & T's offer was inadequate as it was limited to 7 years and HBO was not part of the proposal.
Reporting by Diane Bartz, editor of Franklin Paul