US: Judges grill DOJ over to AT&T-Time Warner merger

According to a report by The Hill, federal appeals court judges grilled the Department of Justice (DOJ) on Thursday, December 6, over its challenge to a lower court’s decision to bless the AT&T-Time Warner merger.

It’s unclear from the tough questioning where the judges will land in their consideration of the appeal, but the government, which challenged the US$85 billion merger last year and faces a high burden in the appeals process, faced an intense interrogation from the panel.

“This is a merger that will shape the industry for decades to come,” Michael Murray, the DOJ’s lawyer, said during his oral argument before the DC Circuit Court of Appeals.

The questioning centered on the economic model that the government relied on in court earlier this year and the trial judge’s interpretation of it in his decision to approve the merger unconditionally.

While the judges also spent a good deal of time on AT&T’s offer to arbitrate any impasse in licensing negotiations, the appeal just come down to the trial judge’s leeway in examining the evidence and coming to conclusions about shortcomings in economic theories.

AT&T attorney Peter Keisler stressed how his side showcased the problems in the government’s economic modeling and how there wasn’t any rebuttal evidence offered by the other side that supported the real-life application of these models showing raised prices on consumers.

“What the trial showed about the model was its extreme fragility in response to even modest changes,” he said. “And even when you’re applying all of the government’s assumptions and inputs, it only predicts a 0.2 percent increase, which wasn’t shown to be statistically significant.”

Full Content: Hollywood Reporter & The Hill

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