Tags: at&t | merger | time warner | court

AT&T Merger Trial Opens With Fight Over Internal Documents

AT&T Merger Trial Opens With Fight Over Internal Documents
(Dreamstime/Rob Williams)

Monday, 19 March 2018 02:54 PM EDT

The U.S. antitrust trial against AT&T Inc.’s proposed takeover of Time Warner Inc. opened with clashes over whether the Justice Department should be allowed to introduce internal company documents that it claims contain “startling” admissions.

U.S. District Judge Richard Leon is weighing arguments from the department’s antitrust division and AT&T about the standards for allowing the documents as evidence in the trial, which began Monday in federal court in Washington.

The dispute could be key to the government’s argument that the Time Warner takeover should be blocked on antitrust grounds. In merger lawsuits, antitrust officials often rely on emails or internal memos, known as “hot docs,” in which employees make damaging statements that support the government’s case that a deal is a threat to competition.

Justice Department attorney Eric Welsh told Leon on Monday that the emails in question contain “startling” admissions by employees and that it was up to the companies to “explain away” what is said in them.

Petrocelli Pushback

AT&T attorney Daniel Petrocelli pushed back, saying the government needs to meet the standards for introducing the documents at trial. Many are from low-level employees with little authority, he said. He cited 18 government-offered records that he said were generated by a recent business school graduate with no say over the deal.

Petrocelli told the judge the contested email messages should only be accepted as evidence if accompanied by the testimony of a witness who can explain what was being said and in what context. The records also need to be relevant to what’s at issue before the court.

The Justice Department argues AT&T’s $85 billion takeover of Time Warner should be blocked because it will lead to higher prices for consumers. It is the first major antitrust case brought under President Donald Trump and its outcome could influence how the U.S. reviews mergers of any two companies in similar industries.

A government loss could open the floodgates to a wave of such tie-ups, known as vertical mergers. It will also mean a thumbs up or down for AT&T’s answer to the mounting threat the pay-TV industry confronts in online video giants such as Netflix Inc. and Amazon.com Inc.

If the grand design of AT&T’s Chief Executive Officer Randall Stephenson prevails, the telecom company will emerge as an entertainment giant, with movies, TV and news to feed its 119 million mobile, internet and video customers.

If the government wins, it will be the second time in seven years that the U.S. has derailed a major deal by Stephenson and will leave the largest U.S. pay-TV provider and phone company with fewer options for growth.

© Copyright 2026 Bloomberg News. All rights reserved.


StreetTalk
The U.S. antitrust trial against AT&T Inc.'s proposed takeover of Time Warner Inc. opened with clashes over whether the Justice Department should be allowed to introduce internal company documents that it claims contain "startling" admissions.
at&t, merger, time warner, court
436
2018-54-19
Monday, 19 March 2018 02:54 PM
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