Justice Department appeal says AT&T-Time Warner merger decision is ‘contrary to fundamental economic logic’

In an appeal brief filed today, the Justice Department made its case for why the DC Circuit Court of Appeals should overturn a lower court’s decision to let AT&T and Time Warner merge.

The department’s argument, in short, says that the district court judge made a series of mistakes by not considering all the facts in his economic analysis approving the merger. The appeal argues that the judge “clearly erred” in his analysis of bargaining leverage Time Warner would gain in the merger, and that the resulting decision is “contrary to fundamental economic logic and the evidence.”

Furthermore, the Justice Department’s brief argues, the judge’s analysis of the industry is “internally inconsistent,” and he also erred by not properly considering evidence that the merger would lead to price increases.

While the district court’s ruling has been controversial, the decision was undoubtedly a major setback for the Justice Department. The rebuke not only allowed the merger to go through over the department’s objections, but was a one-sided rebuke of the department’s case as a whole.

“Appeals aren’t ‘do-overs,’” AT&T general counsel David McAtee said in a statement. “After a long trial, Judge Leon weighed the evidence and rendered a comprehensive 172-page decision that systematically exposed each of the many holes in the Government’s case. There is nothing in DOJ’s brief today that should disturb that decision.”