On the final closing of the trial against the lawsuit filed by the Justice Department to halt the $85 billion merger deal, AT&T Inc. (NYSE:T) and Time Warner Inc (NYSE:TWX) has requested the judge to allow the deal unconditionally. They argue that government failed to show the substantive evidence about how the merger of the proposed companies would harm the competition.
The government has been taking a stand that the merged entity would harm the competition and increase the price to the pay TV distributors. If the pay TV distributors do not agree for the price hike, the company may withhold the Time Warner content that includes TNT, HBO and CNN. According to the government, the consumers would be forced to pay higher charges to view their favorite channels.
The attorneys of Time Warner and AT&T said the government is unable to show the credible evidence to justify its stand that the merger would harm the competition.
Mr. Richard Leon, the judge has told both the companies to provide an option that prevents the competitive harm caused due to this merger deal. But, Time Warner and AT&T informed the court that there is no need to provide an alternative. According to the attorneys, there is no basis in the law or no proven harm to ask for the remedy. They argue that court should refrain from issuing an injunction to block the merger and instead rule in favor of the merger.
The editorial boards of the publications such as the Economist and the Wall Street Journal as well as the antitrust experts, who are keenly watching the proceedings of the trial, said the justice department is failed to give any substantial evidence to prove the case.
Mr. Leon, the judge has asked Mr. Craig Conrath, the lead attorney (Justice Department), during the trial closing earlier this week whether the court is recognizing any anti-competitive harm for imposing any remedy. The lead attorney said, it will harm the competition and AT&T should divest Tuner division of Time Warner as a remedy.
AT&T is averse to this remedy and said it would destroy the very purpose of this deal in the interest of the consumers. Time Warner and AT&T would risk losing the pay TV distributors and the associated revenue if they increase the prices.
According to Time Warner and AT&T, the proposed merger deal is to compete with firms like Apple Inc. (NASDAQ:AAPL), Alphabet Inc (NASDAQ:GOOGL), Facebook, Inc. (NASDAQ:FB) and Netflix, Inc. (NASDAQ:NFLX) that recently forayed into the content arena.