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  • 12 June 2018

People walk by an AT&T store in New York City, on May 11, 2018.Image copyright AFP/Getty

A US district court judge has cleared the merger of telecoms giant AT&T and media firm Time Warner, in a major defeat for government regulators.

The US had sued to block the deal, arguing that it would reduce competition in pay TV and lead to higher prices for consumers.

Judge Richard Leon rejected those arguments, approving the deal without conditions.

The ruling is expected to stop regulators blocking mergers elsewhere.

The lawsuit against AT&T had slowed down that kind of deal-making, as a sign that the Department of Justice, under new Trump appointees, was taking a more hardline stance on mega-deals.

Analysts say the decision will free firms such as Comcast, which is considering bidding for 21st Century Fox assets, including its stake in Sky, in a challenge to a deal announced between Fox and Disney last year.

‘Relieved’

Judge Leon’s decision comes more than 18 months after AT&T announced in 2016 its plans to buy Time Warner in a transaction then worth almost $ 85bn.

The deal is set to unite AT&T’s significant wireless, satellite television and internet business with Time Warner’s media properties, which include HBO and CNN.

Attorney Daniel Petrocelli, who represented AT&T, said the firm expects to complete the transaction before 21 June.

“We’re disappointed that it took 18 months to get here, but we are relieved that it’s finally behind us,” he told reporters after the decision.

The argument

The lawsuit comes as the growth of online firms like Amazon and Netflix have scrambled traditional lines of competition, spurring consolidation and prompting concerns about monopolies.

AT&T said the acquisition would help it compete with online streaming firms.

Government lawyers had argued that the takeover would hurt innovation and allow AT&T to charge rival providers more for its must-have content – costs that would ultimately be passed on to consumers.

It urged the court to block the deal or require the sale of certain businesses as a condition of approval.

BBC News – US & Canada

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