"We are disappointed with the Court's decision today", a spokesperson for the agency said in a statement. It's unclear at the present time if Fox will stick with the Disney deal or start a potential bidding war.
CNN is owned by Time Warner.
AT&T has demonstrated considerable optimism about the deal in recent weeks. CNBC reports that Comcast will immediately move forward with its all-cash offer for 21st Century Fox assets if the judge approves the deal.
Regulators will still likely scrutinize similar deals, and there is no guarantee that the district court's approval of AT&T's merger with Time Warner means that other major media acquisitions would be approved, several antitrust attorneys told Reuters. Fox stock jumped more than 6% in after-hours trading following the ruling.
The nuances of this case are important, as the implications of this decision reach far beyond the individual businesses of AT&T and Time Warner to the vast media landscape as a whole. Seats for the ruling at the E Barrett Prettyman courthouse in downtown Washington were in such demand that lines began forming outside the courthouse a full day before the scheduled 4pm announcement.
AT&T in a six-week trial argued that the purchase of Time Warner would allow it to gain information about viewers needed to target digital advertising, much like Facebook Inc and Alphabet Inc's Google already do.
The two then had a long lunch in the Time Warner dining room in NY and agreed that their industries were under siege.
The opinion comes 20 months after AT&T announced its plans to buy Time Warner in a transaction then worth nearly $85bn. Announced in October 2016, it was seized on by then presidential candidate Donald Trump as the sort pf deal his administration would block.
U.S. 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.
The DOJ argued that buying Time Warner and its stable of popular TV programming would give AT&T too much control over programming and distribution.
The judge rejected the government's argument that the merger would hurt competition in pay TV and cost consumers hundreds of millions of dollars more to stream TV and movies.
During the trial, the judge heard from dozens of witnesses, including AT&T CEO Randall Stephenson and Time Warner CEO Jeffrey Bewkes.
Some critics of President Trump have questioned whether the case was brought as political payback against Time Warner's CNN for unfavorable coverage of President Trump, who often called the cable news channel "fake news". Therefore, AT&T would likely increase the rates that other content distributors must pay to air Time Warner content - forcing its rivals to either raise prices on their subscribers (which would inspire some consumers to switch to DirectTV), or else accept lower profit margins (which would impair their ability to compete with AT&T in the long term).