The merger unites one of the nation's largest telecom providers with a media giant.
The result, if it stands, could pave the way for a wave of M&A action much like ones already in the works in the media biz like Disney-Fox-Comcast and Sinclair-Tribune. Judge Leon asked in response to a statement about the threat of content blackouts. It's already purchased satellite TV provider DirecTV for almost $49 billion.
Before the trial started, AT&T lawyers said the Time Warner deal may have been singled out for government enforcement but Judge Leon of the US District Court for the District of Columbia rejected their bid to force the disclosure of White House communications that might have shed light on the matter.
USA district judge Richard Leon dismissed the antitrust case brought by the justice department last November, the culmination of a 20-month ordeal that has seen the deal attacked by Donald Trump, critics of media consolidation and consumer groups.
Assistant Attorney General Makan Delrahim said the Justice Department was "disappointed" by the decision, but did not say if it planned to appeal.
AT&T-Time Warner is considered a vertical merger, as AT&T is a content distributor and Time Warner is a content creator.
"This decision will have an outsized effect because there are so few antitrust trials that challenge vertical mergers", said Michael Carrier, a Rutgers University law professor specializing in antitrust. CNBC is reporting that Comcast will try to buy Twenty-First Century Fox if AT&T buys Time Warner.
Media executives increasingly say that content creation and distribution must be married to survive against rising technology companies like Amazon and Netflix.
AT&T, which has invested heavily in a streaming video service called DirecTV Now, is free to bulk up its original programming with Time Warner content.
Time Warner owns CNN, HBO, home to Game of Thrones and Veep, and Warner Brothers, whose franchises included Batman, the Lego movies and Harry Potter. Ultimately, the government argued this would harm competition and innovation as well as raise prices for consumers.
Coaxial TV Cables are seen in front of AT&T and Time Warner logos in this picture illustration taken June 13, 2018. AT&T will now have a major foothold in the media industry.
Shares of both companies were rising in early trading Tuesday.
Free Press Policy Director Matt Wood added that AT&T will now "be able to surveil its customers across the entire internet and target ads to them in ways that even Google and Facebook would be hard-pressed to match". He also warned that the government might try to find a way around the courts to block the deal. In other words: Calculated using expected revenue, AT&T is paying $36 billion for the portion of Time Warner's business that comes from AT&T's competitors. It was, Trump said, "a deal we will not approve in my administration".
AT&T disputed the government's math, and tried to prove that President Trump meddled in the government's merger review.