Ownership

The US Supreme Court agreed to hear Apple's bid to kill an antitrust lawsuit over the market for iPhone apps in a case that could shield e-commerce companies from consumer claims over high commissions. The lawsuit accuses Apple of monopolizing the app market so it can charge excessive commissions of 30 percent. Apple, backed by the Trump administration, says it can’t be sued because the commission is levied on the app developers, not the purchasers who are suing.

This has been, perhaps, one of the most important weeks in the history of the Internet. On June 11, the repeal of net neutrality consumer protections went into effect, laying the regulatory groundwork for large Internet service providers to (transparently) favor some (their own) content. On June 12, a court approved a huge combination of content with a major internet service provider. We can do the math.

To spare you the pain of reading the 170-page opinion [of AT&T/Time Waner] yourself, I went through and pulled out some highlights.  You will note again and again that Judge Leon goes into incredible detail about the businesses of the past, like how the deal might affect cable TV negotiations, while naively glossing over the details of how media works in the present and future. (Buying Time Warner will allow AT&T to… put together clips of CNN to show on phones? Very innovative.) You will also note that the government put on what seems like a very, very weak case.

A Q&A with John Stankey, the new AT&T executive in charge of new Time Warner properties. 

Historians may look back on this week as a turning point in the evolution of the internet. First came the end of net neutrality rules which ensured that broadband and wireless providers couldn't act as gatekeepers picking and choosing who succeeds on the internet and who doesn't. Then a federal judge decided to allow AT&T, one of the largest broadband and wireless providers in the country, and Time Warner, a major media company, to merge without any conditions.

Ultimately, the internet could someday look like the current cable model where the internet service provider takes a portion of advertising revenue and subscriber fees. “This would be gradual and would most likely affect new services that would have been free, but we may now have to pay for,” said Marty Puranik, chief executive officer of cloud service provider Atlantic.Net.

AT&T announced it had completed its $85.4 billion acquisition of Time Warner. The Justice Department still has 60 days from the date of the ruling to file an appeal, even if the companies close the merger, and such a filing remained a possibility. There was a time limit on when the government could seek an injunction, because the merger agreement between the companies expires on June 21. If an injunction had been granted, the companies would have had to extend the date or AT&T would have had to pay Time Warner $500 million in what is known as a reverse termination fee.

As the race to become the first company worth $1 trillion enters the final lap, technology monopolies are dominating the stock market. The five biggest companies by market value are US tech stocks: Apple, Amazon, Alphabet, Microsoft and Facebook. Between them they accounted for more than a third of the $2.7 trillion increase in value of the S&P 500 in the past 12 months. Worse, the top five now make up more than 15% of the S&P, the most for any top five since early 2000. Is it time to worry that the market is getting top heavy?

The Justice Department has agreed to let AT&T complete its purchase of Time Warner, according to joint government filings, likely clearing the way for the deal to be completed as soon as June 15. A federal judge ruled June 12 that AT&T's $85.4 billion bid for Time Warner was legal, imposing no conditions on the merger. The government had the option to seek a stay, delaying the merger for a designated waiting period, but has forgone that option. The Justice Department can still appeal the decision, even after the completion of a merger.

The New York State Public Service Commission ordered Charter Communications to pay a $2 million fine and complete network construction that was required as a condition of Charter's purchase of Time Warner Cable. If Charter doesn't meet its merger-related obligations, the company will "face the risk of having the merger revoked," the commission said. The commission said that state law gives it the authority to rescind merger approvals and threatened to start a proceeding to rescind or change the merger approval order if Charter refuses to comply.