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AT&T loses bid to learn if White House swayed Justice Department on Time Warner deal

An AT&T store in Times Square in New York in 2017.
An AT&T store in Times Square in New York in 2017.
(Richard B. Levine / Sipa USA/TNS)
Bloomberg

AT&T Inc. lost its bid to uncover evidence the Trump administration may have influenced the government’s decision to challenge AT&T’s takeover of Time Warner Inc.

On Tuesday, U.S. District Judge Richard Leon in Washington denied AT&T’s request that the Justice Department identify any communications between the White House and Atty. Gen. Jeff Sessions or between Sessions and the Justice Department’s antitrust division about the merger. AT&T had sought logs cataloging the existence of any such communications.

The decision is a win for the Justice Department and a setback for AT&T, which has suggested that President Trump’s animus toward Time Warner’s CNN may have been behind the Justice Department’s decision last year to sue to block the proposed $85-billion takeover.

Getting that evidence could have provided AT&T an additional weapon to defeat the government’s case by arguing the company was singled out for “selective enforcement” of antitrust laws. If the companies can’t establish political meddling, the outcome of the trial — which is set to begin in a month — will hinge on evidence from both sides about whether the merger threatens competition.

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AT&T shares fell 1% on Tuesday to $36.77. Time Warner fell less than 1% to $95.07.

“We respect the judge’s decision and look forward to the upcoming trial,” said Dan Petrocelli, lead trial attorney for both Time Warner and AT&T. The Justice Department did not immediately comment.

Leon said the companies hadn’t made a credible showing that they were singled out. AT&T had tried to make its case by pointing out that deals like the Time Warner purchase — “vertical mergers” that unite companies in different parts of a supply chain rather than uniting direct competitors — are generally approved with settlements. The judge agreed with the Justice Department that the government often finds antitrust problems with such deals.

“So while it may, indeed, be a rare breed of horse, it is not exactly a unicorn!” Leon wrote about the lawsuit.

McLaughlin writes for Bloomberg.


UPDATES:

2:30 p.m.: This article was updated with comments from attorney Dan Petrocelli and U.S. District Judge Richard Leon, with stock prices and with additional details.

This article was originally published at 1:05 p.m.


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