The U.S. Department of Justice released its written argument explaining why it's appealing AT&T's $85 billion acquisition of Time Warner, a deal that was approved by U.S. District Court Judge Richard Leon in June.
The government argues Judge Leon ignored "mainstream economics" in his decision because he refused to see a deal as having "an appreciable danger" of raising prices on consumers in the future.
The government said Judge Leon ignored economic theory by claiming Time Warner wouldn't have increased bargaining power over pay-TV distributors by linking up with AT&T. This was one of the DOJ's primary arguments during the initial case to the District Court -- that AT&T could charge companies such as Comcast, Charter and Dish more money for Time Warner with the fallback of blacking out networks such as CNN, TNT and TBS and offering them on DirecTV, which AT&T owns. If pay-TV operators refused to pay more, customers could switch their service to DirecTV, setting up a "win-win" for AT&T.
AT&T successfully defended against this charge, arguing that the economics behind buying Time Warner only made sense if the company made programming available to as many people as possible.