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United States v. AT&T Inc. - 310 F. Supp. 3d 161 (D.D.C. 2018)

Rule:

To further assist courts in the prospective inquiry under Section 7 of the Clayton Act15 U.S.C.S. § 18, the D.C. Circuit has set forth a burden shifting framework for use in determining whether a proposed transaction violates the Clayton Act. Under that framework, the Government must first establish its prima facie case by: (1) identifying the relevant product and geographic market and 2) showing that the proposed merger is likely to substantially lessen competition in that market. If the Government satisfies its prima facie burden, the burden then shifts to defendants to provide sufficient evidence that the prima facie case inaccurately predicts the relevant transaction's probable effect on future competition. One way defendants may do so is to offer evidence that post-merger efficiencies will outweigh the merger's anticompetitive effects. If the defendants put forward sufficient evidence to rebut plaintiff's prima facie case, the burden of producing additional evidence of anticompetitive effect shifts to the Government, and merges with the ultimate burden of persuasion, which remains with the Government at all times.

Facts:

The U.S. Department of Justice's Antitrust Division brought this suit to block the merger between AT&T Inc. (AT&T) and Time Warner Inc. (Time Warner) as a violation of Section 7 of the Clayton Act, claiming that the acquisition will substantially lessen competition in the video programming and distribution market nationwide and harming consumers nationwide by increased prices for access to Turner networks.

Issue:

Should the merger be enjoined?

Answer:

No

Conclusion:

The district court denied the Government's request for an injunction under Section 7 of the Clayton Act, because the Government failed to carry its burden to show that the merger was likely to substantially lessen competition, the merger would result in significant benefits to customers of the merged company, specifically, the merger would cause AT&T to lower the price of DirecTV, resulting in $352 million in annual savings for DirecTV's customers, and the combined entity would not likely restrict HBO as a promotional tool in order to harm AT&T's distribution rivals and thereby lessen competition in the marketplace.

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