AT&T/TW Trial Decision Got the Economics Right, Now-Joined Companies Say
The U.S. District Court that permitted AT&T buying Time Warner "well understood" the flawed economics behind DOJ's bargaining theory that was the basis for its opposing the deal, the now-combined companies said in a U.S. Court of Appeals for the…
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D.C. Circuit appellee brief (in Pacer, docket 18-5214) Thursday. It was empirical evidence, such as analyses of prior comparable transactions, not a misunderstanding of business principles, that caused the lower court to reject DOJ's argument, the companies said. They said it was "fatal" to DOJ's case that U.S. District Judge Richard Leon of Washington accepted Justice's bargaining model but found the agency hadn't shown the model actually predicts a net increase in retail prices. The merged parties said among the model's flaws is that it relied on "highly disputed real-world facts" like how many customers would go to a different MVPD if certain programming were dropped and that the agency sometimes relied on flawed figures. DOJ didn't comment. Justice's appeal -- based largely on the argument Leon's decision was flawed in its handling of the economics of bargaining and its application of the idea of corporatewide profit maximization -- is seen facing dicey odds (see 1808070025).