Judge clears AT&T takeover of Time Warner

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The Justice Department could decide to appeal the ruling, however.

Other media stocks that saw big price moves after the judge's ruling was announced included 21 Century Fox (FOX), whose shares were up almost 5 percent on speculation it could be the subject of a bidding war between Disney (DIS), which already has a $52 billion all-stock deal for Fox on the table, and a media giant like Comcast (CMCSA), which in recent weeks has been hinting of its intention to make an even larger all-cash bid for Fox.

Justice Department attorneys argued in a six-week trial in a windowless Washington courtroom earlier this year that AT&T could use its control over popular Time Warner cable channels such HBO, TNT and CNN to slow the growth of popular streaming services and hike bills for cable-TV customers.

The Justice Department is not likely to be put off by the loss, said Amy Ray of the law firm Cadwalader, Wickersham & Taft LLP, noting it had prevailed in stopping other mergers between rivals.

AT&T CEO Randall Stephenson remained at company headquarters in Dallas, and he learned of the ruling when AT&T general counsel David McAtee called him, a spokesperson said.

The decision hinges on whether the combination of AT&T's pay-TV and mobile-phone businesses with Time Warner's content would raise prices for consumers.

The government estimated costs to industry rivals, such as Charter Communications Inc, would increase by $580 million a year if AT&T owned Time Warner.

Their concerns only grew heightened after Monday, with the official end of federal net neutrality rules that required broadband providers, including AT&T, to treat all web traffic equally - and not prioritise their TV, movie or other content offerings over competitors.

Leon's ruling could shape the government's future competition policy. "The fact is that they've gotten a little easier, and we'll see a big flurry of deals".

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Leon announced his decision after the stock market closed on Tuesday, and Comcast shares slumped 4 percent in after-market trading on fears that it would overpay for Fox.

"We continue to believe that the pay-TV market will be less competitive and less innovative as a result of the proposed merger between AT&T and Time Warner", he said in a statement obtained by CNN.

Before the trial started, AT&T lawyers said the Time Warner deal may have been singled out for government enforcement but the judge rejected their bid to force the disclosure of White House communications that might have shed light on the matter.

Of course, that was prior to the court's ruling on the AT&T and Time Warner merger today.

The approval of AT&T and Time Warner's merger works in Comcast's favor, spurring it to finalize its all-cash offer, which is said to be in the "advanced stages". Comcast and Verizon are also jockeying for position in the new landscape. That same day, Trump, then a candidate for president, pledged that his administration would block the deal.

After the decision, Mr Petrocelli said: "We were surprised when the case was brought and as I said in closing arguments, it's a case that never should have been brought".

AT&T and Time Warner say the combined company can leverage viewer data to make better content to sell more targeted ads, which they claim could help lower prices for consumers. The Federal Trade Commission, which shares antitrust jurisdiction with the Justice Department, has won only half of the emergency orders it has sought since 2004, according to Bloomberg Intelligence.

And ultimately that's what worked.

"We're disappointed that it took 18 months to get here, but we are relieved that it's finally behind us", he told reporters after the decision.

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