The pending $85 billion merger between AT&T and Time Warner is headed to nowheresville, says prominent expert on mega-deals, University of Pennsylvania law and business professor Herbert Hovenkamp.
In its lawsuit against the merger, the Justice Department has argued the new company would stifle competition and force customers to pay more. Hovenkamp — once dubbed “the dean of American antitrust law” by The New York Times — said this argument will ultimately win out in court.
“To me, it is a close call, but I think the government has met its burden,” Hovenkamp told the New York Post.
Both AT&T and Time Warner have strongly pushed back against the government’s position. Time Warner CEO Jeff Bewkes testified in April it was “ridiculous” to believe it would allow the company to raise licensing fees and blackout pay-TV operators, as the DOJ had argued. AT&T owns satellite giant DirecTV, while Time Warner offers a slew of channels, including TNT and HBO.
The deal — first pushed in late 2016 — was heavily criticized by President Trump, and has been in limbo ever since the Department of Justice sued to block it from going through last fall. The DOJ didn’t appear as confident as Hovenkamp it would succeed in its closing arguments last month, however, with its lawyers pushing for a “partial divesture,” where AT&T doesn’t absorb all of Time Warner, if the court lets it go forward.
U.S. District Judge Richard Leon — the lone decision maker in the case — is expected to make his decision by June 12.