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Justice Department appeals approval of AT&T-Time Warner deal

Judge Richard Leon, who presided over the lawsuit the DOJ had brought to block the deal, ruled last month that the government had failed to show that the deal violates antitrust law, and in his opinion ripped apart its case. AT&T has since closed the acquisition of Time Warner, including CNN.

AT&T has since re-named the division WarnerMedia, created as a separate unit from the rest of the company, in part in case of an appeal.

The Justice Department sued to stop the deal last year, saying that a distributor, AT&T, owning the likes of HBO, CNN and Warner Bros. would harm consumers by causing an increase in prices and would hurt innovation and competition. But after a six-week trial, Leon said he didn’t buy that, and signed off on the deal with no conditions and knocked down the government’s contentions point by point.

“The Government has failed to meet its burden of proof to show that the merger is likely to result in a substantial lessening of competition,” he wrote in his ruling.

The ruling was seen as a green light for other companies to pursue mergers, and in the ensuing months, bidding wars have erupted between Comcast and Disney for a big chunk of 21st Century Fox’s assets.

Using unusually strong language, Leon discouraged the Justice Department from asking him to put the ruling on hold while it considers an appeal. He said such a stay would be “manifestly unjust” because it would have the effect of killing the acquisition. The Justice Department did not seek a stay, and the deal closed.

Leon, though, also warned against an appeal, writing in his decision “[A]s my 170-plus page opinion makes clear — I do not believe that the Government has a likelihood of success on the merits of an appeal.”

Now the case will go to the D.C. Circuit Court of Appeals, where a three-judge panel will hear the appeal. It’s possible the court could place the case on a fast track because the longer an appeals process takes, the more integrated the two companies will become. AT&T completed its acquisition of Time Warner on June 14 and formed WarnerMedia a day later.

In theory, the case could end up in front of the Supreme Court, which some people in the legal community have been hoping for since the Supreme Court has not taken up a merger case since the 1970s.

“The Court’s decision could hardly have been more thorough, fact-based, and well-reasoned. While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DOJ has chosen to do so under these circumstances. We are ready to defend the Court’s decision at the D.C. Circuit Court of Appeals,” AT&T General Counsel David McAtee said in a statement.

Spokespeople for the Justice Department declined to comment.