Success Story: AT&T – Time Warner
May 30, 2019
Compass Lexecon was retained by AT&T and Time Warner to provide economic analysis and expert testimony concerning the merger of the two companies, and to assist with the litigation brought by the U.S. Department of Justice to block the deal. This litigation was the first challenge of a vertical merger brought by the Department of Justice in decades and was closely followed by practitioners and the press as a critical precedent-setting case.
Compass Lexecon experts Dennis Carlton, Michael Katz, Daniel Fischel and Rajiv Gokhale all filed reports in the litigation. Dennis and Michael were both called to testify, where Dennis acted as the primary economic witness responding to the Government’s economics expert, and Michael provided further economic testimony on the role of program access rules and arbitration commitments that the companies had made in addressing any potential theories of harm. Compass Lexecon also supported Professor Peter Rossi who testified as to problems with survey instruments and data relied upon by Government witnesses.
In the end, Judge Richard J. Leon ruled in favor of AT&T and Time Warner, permitting the merger to proceed without imposing conditions. Judge Leon’s opinion cited all of Compass Lexecon’s testifying experts, and he agreed with Dennis’ conclusion stating that, “There’s absolutely no statistical bias to support the Government’s claim that vertical integration in this industry leads to higher content prices.”