At the heart of the DOJ's complaint is an assumption that the merged entity would use its market power to raise the price of content now owned by Time Warner, or threaten to withhold programming, including hit shows such as Game of Thrones and NCAA March Madness.
His 172-page decision delivered a stinging defeat to Trump administration's Justice Department while opening the door for Comcast Corp.to bid for parts of 21st Century Fox and become an worldwide company. "The proposed merger would result in fewer innovative offerings and higher bills for American families".More news: NCAA changes redshirt rule in college football
The ruling could also prompt a cascade of pay TV companies buying television and movie makers, with Comcast Corp's bid for some Twenty-First Century Fox Inc assets potentially the first out of the gate.
A merged AT&T-Time Warner could, in principle, refuse to supply content to some distributors in order to drive consumers to purchase its own access and content bundles, but it would not be in the merged company's financial interest to do so.
Analysts say the judge's go-ahead will likely rewrite the rules on how courts apply antitrust laws, paving the way for a number of other potential sales involving names like Comcast, Disney, 21st Century Fox and several other content creation and distribution companies. The decision now rests with Judge Leon because the Justice Department sued AT&T to block the merger. Cable, satellite and wireless carriers all see buying content companies as a way to add revenue.
Leon, whose skepticism about the government's case was clear during the trial, didn't buy any aspect of the the government's theory that a combined company would give AT&T too much leverage in programming talks with competitors of Time Warner's Turner Broadcasting.More news: Why Nike's World Cup boots have upset Iran coach Queiroz
In response to the ruling, US Assistant Attorney General Makan Delrahim said, "We are disappointed with the court's decision today".
Former Federal Communications Commission staff attorney Blair Levin said a loose interpretation of antitrust law would allow the government to block nearly any deal, and open up the process to political interference. Deals such as this one, in which the two companies are in related industries but do not produce competing products, are usually approved by federal regulators.
The trial was closely watched as the fate of the deal could have had ripple effects on future deals and everyone from media giants to streaming service providers. Trump weighed in again after the justice department filed its suit: "Personally, I've always felt that that was a deal that's not good for the country".More news: Italian military ships to escort ‘Aquarius’ to Spanish port of Valencia
The Justice Department rarely sues to block a "vertical merger" such as the AT&T and Time Warner because they are not considered as economically unsafe as "horizontal mergers" - or ones in which a companies buys direct competitors such as T-Mobile's pending deal for Sprint.