September 27, 2018 / 6:42 PM / 3 months ago

Business groups ask U.S. court to not undo AT&T merger with Time Warner

FILE PHOTO: A combination photo shows the Time Warner shares price at the New York Stock Exchange and AT&T logo in New York, NY, U.S., on November 15, 2017 and on October 23, 2016 respectively. REUTERS/Lucas Jackson (L) and REUTERS/Stephanie Keith/File Photo

WASHINGTON (Reuters) - The U.S. Chamber of Commerce and other powerful business groups asked an appeals court on Thursday to not undo AT&T Inc’s (T.N) purchase of movie and TV show maker Time Warner, despite the protests of the Justice Department.

The chamber, backed by the National Association of Manufacturers, Business Roundtable and others, argued that stopping the merger would “undermine myriad transactions that generally benefit consumers.”

The business groups argued that companies had long assumed that if they bought a supplier or distributor — generally called a vertical merger — that the deal would be considered good for the consumer and would be allowed.

“The vague legal standard that the government ... advocate(s) would cloud the business community’s ability to ascertain whether vertical mergers are lawful, making it more difficult to invest in transactions with enormous potential to lower prices and enhance innovation—all of which benefit a diverse array of customers,” the business groups said in a brief court filing.

The Justice Department lost a lawsuit in district court to prevent AT&T, which owns satellite company DirecTV, from buying Time Warner over concerns that AT&T would seek to raise prices when licensing Time Warner’s news, sports and other programming to DirecTV’s cable and satellite rivals.

AT&T closed the Time Warner deal in June and has said it would manage Time Warner’s Turner cable television networks as part of a separate business unit until February 2019 or the conclusion of the government’s appeal to the U.S. Court of Appeals for the District of Columbia.

No date has been set for an oral argument.

The merger, announced in October 2016, was opposed by President Donald Trump. The merged company includes CNN, a frequent target of Trump’s ire.

A group of nine state attorneys general asked the court on Wednesday also to let the lower court stand.

Reporting by Diane Bartz; Editing by Lisa Shumaker

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