Increased-Leverage Theory of Clayton § 7 Harm Ineffective to Enjoin AT&T / Time Warner Merger

The court denied the government’s motion to enjoin the merger of AT&T and Time Warner and determined the government’s “real-world objective” evidence did not show the merger was likely to result in substantially lessening of competition on an increased-leverage theory of harm. “Importantly . . . accepting that straightforward position–i.e., that popular programmers such as Turner are able to demand more for their content than less popular programmers–does not prove that the challenged merger would harm competition pursuant to the Government’s increased-leverage theory of harm. . . . [T]he Government’s increased-leverage theory posits that Turner pre-merger bargaining leverage would materially increase as a result of its post-merger relationship with AT&T and that, as a result, distributors would cede greater affiliate fees than they would absent the merger. To support that contention at trial, the Government primarily relied on defendants’ own statements and documents as well as testimony of third-party competitor witnesses, most (but not all) of whom expressed concern regarding the challeged merger’s potential effects on their businesses. Neither category of evidence, however, is persuasive in proving that Turner’s post-merger negotiating position would materially increase based on its ownership by AT&T.”

United States of America v. AT&T Inc. et al, 1-17-cv-02511 (DCD 2018-06-12, Order) (Richard J. Leon)

2018-06-14T11:46:06+00:00 June 14th, 2018|Antitrust, Docket Report|