UPDATED with government reaction. A federal judge has refused AT&T’s request to compel the U.S. Department of Justice to release its communications with the White House ahead of next month’s landmark trial over the telecom giant’s acquisition of Time Warner.
The heart of the request was AT&T’s conviction that politics — specifically President Donald Trump’s animus toward CNN, a major Time Warner asset — has prompted the government lawsuit seeking to block the $85B deal. But U.S. District Judge Richard Leon said the company had not demonstrated that it had been unfairly treated by regulators.
“We are pleased with and respect today’s decision, which will permit the parties and court to focus on the case at hand,” said DOJ spokesperson Kerri Kupec in a statement. “This case has always been about protecting consumers from competitive harms, and we look forward to presenting our case at trial.”
Investors had a mild reaction to the news. Shares in AT&T shed 1% to finish at $36.77, while Time Warner surrendered a fraction to end at $95.07.
It is hard to overstate the significance of the trial between the government and AT&T, which is scheduled to begin March 19. A host of deals have been held up due to uncertainty swirling around the case, and even major M&A deals announced since the suit was filed last fall — chiefly Disney’s pending deal for most of 21st Century Fox — stand to be affected by the outcome.
The government contends that the combination is inherently anti-competitive, and would result in the financial squeeze being put on rival companies as well as consumers.
Last week, AT&T offered a preview of its strategy, contending in court filings that it believes the government singled the company out and treated it unfairly. It also said it could call Makan Delrahim, head of the DOJ’s antitrust division, as a witness.