TWX/T: Analysis of Vertical Merger Cases Sheds Light on How Court May Review the Proposed Deal

Event Driven Takeaways

  • The DOJ’s lawsuit against Time Warner and AT&T has been characterized as a departure from agency procedure, with the most recent vertical merger challenge in court being several decades old.
  • The most recent vertical merger court cases, while occurring largely in the 1970’s, are dissimilar factually, but provide the legal rubric the court will look to when evaluating the merits of the DOJ’s case to block the TWX/T deal.
  • Additionally, as reported last evening, Time Warner and AT&T filed an answer to the complaint, highlighting what they believe to be a very competitive landscape which makes their transaction a benefit to consumers that poses no risk.
  • The companies also requested, in a motion filed last evening, a trial date of Feb. 20, 2018. The DOJ submitted its own motion, which proposed a May 7, 2018 trial date.
  • Time Warner and AT&T also extended the termination date for the deal to April 22, 2018.

As has been widely reported, the Department of Justice’s lawsuit against Time Warner and AT&T to block their proposed merger is the first challenge to a vertical merger to proceed to litigation in decades. The lawsuit was filed despite, as the companies point out in their answer, attempts to mirror some of the remedies involved in the NBCU/Comcast deal, including arbitration to address certain competition issues. The DOJ’s lawsuit saw a flurry of action last evening with the companies filing an answer to the complaint, a