WASHINGTON (Reuters) – A federal appeals court on Thursday approved the U.S. AT & T Inc ( T.N ) to buy content provider Time Warner.
FILE PHOTO: Smartphone with AT & T logo is seen in front of the screen. Time Warner logo taken in this picture. June 1
The department said Thursday that it would appeal a federal judge's approval of the $ 85.4 billion (65.58 billion pounds) acquisition.
The court approved the Justice Department. 18, with oral arguments "as soon as practicable." That would be a faster-than-normal timetable for an appeals court to hear a case.
The Justice Department said on Wednesday, in requesting the expedited schedule, that AT & T, which owns DirecTV, could use Time Warner's Turner content, especially on live sports and news, to raise the costs of smaller, rival pay TV companies.
"The merged firm will have the incentive and the ability to raise its rivals' costs and stifle growth of innovative next-generation entrants," the department said in the filing.
Essentially, they argued, AT & T could push smaller pay TV companies to pay more for Turner's CNN and sports programming, which would consumers. They also argued that withholding Turner content from online distributors, such as Hulu, would stunt the development of cheaper online video.
The Justice Department said this Court Judge Richard Leon "rejected fundamental principles of economics" in his decision to rule for the companies. Leon has called one of the government's arguments against the deal "gossamer thin" and another "poppycock."
Under an agreement with the Justice Department, the companies closed the deal in June.
One of the many people who are skeptical that the government wants to prevail is AT & T's Chief Executive Randall Stephenson, who said that was the reason. "We think the likelihood of this thing is reversed or overturned is really remote," he said.
Reporting by David Shepardson and Diane Bartz; Editing by Sandra Maler