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 U.S. 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. The Trump Justice Department sued to block the $85 billion merger, arguing that it would hurt competition in pay TV and cost consumers more to stream TV and movies.
Using unusually strong language, Leon said it would be "manifestly unjust" for the government to ask him to put his own ruling on hold, because if he were to do so, it could have the effect of killing the deal, which has a deadline for completion of June 21.
Makan Delrahim, the Justice Department's antitrust chief, said prosecutors were "disappointed" with the decision but did not reveal whether they would seek a stay or appeal the ruling.
Shares of AT&T fell about 1.3 per cent in after-hours trade following the decision, while Time Warner rose more than 5 per cent. Comcast was down 3 per cent.
AT&T Inc, which owns DirecTV, awaits a court ruling on Tuesday that will determine if it can buy Time Warner Inc, a decision that could prompt a cascade of pay TV companies buying television and movie makers and the first big test of the Trump administration's antitrust teams. Last fall, he presented AT&T and Time Warner with two options: Sell the majority stake in either DirecTV or Turner Broadcasting.
The biggest impact of this deal will be felt quickly, as Comcast will now formally make an offer to Fox for the majority of its assets.
Critics charged that Trump had come out against the deal because of Time Warner's CNN, which has been highly critical of his presidency. The companies then entered into discussions with the DOJ past year and rumors surfaced that the agency had suggested some divestitures in order for AT&T to avoid an antitrust lawsuit. The Department of Justice objected to the ruling, saying the deal violates antitrust law.
The Justice Department has not brought a suit seeking to stop a vertical merger - whereby companies operating in different spaces combine - since 1979. A loss for AT&T and Time Warner could have signaled a new era of government scrutiny over so-called "vertical mergers" and could have halted attempts by companies like Disney, Fox and Comcast to announce their own megadeals. AT&T will now have a major foothold in the media industry.
Trump's frequent attacks on CNN led to much speculation, including from AT&T Chairman and CEO Randall Stephenson, that the president's opposition stemmed from anger over the network's coverage rather than concern over greater corporate consolidation.
With control over a significant portion of the content, AT&T is now in a good place to keep prices high among rivals and prevent streaming TV services from offering cut-price cable alternatives.
But AT&T rejected that idea, stating in a court filing that, "Divestitures here would destroy the very consumer value this merger is created to unlock".