By Jeanne M. Cors
On June 12, following a six-week trial, a federal court in the District of Columbia rejected the U.S. Department of Justice's effort to block the megamerger between AT&T Inc. and Time Warner Inc. on antitrust grounds. The case is of note because it appears to signal a more aggressive approach by DOJ to vertical mergers and is the federal government's first court challenge of a vertical merger in nearly 40 years.
Since the late 1970s the enforcement agencies have challenged a very small percentage of vertical mergers and each of those matters was resolved by the parties without trial. The district court's refusal to block the merger has the potential to check the government's new-found
larger vertical mergers in the near future and provide companies and practitioners with greater clarity regarding the standards the antitrust enforcement agencies will apply in evaluating vertical mergers.