DOJ sues to challenge AT&T-Time Warner merger

The Justice Department is suing to block the AT&T - Time Warner merger, says report

Reports: DOJ Set To File Lawsuit To Block AT&T's Takeover Of Time Warner

DOJ officials on Monday said that they couldn't agree with the companies on an "adequate remedy" that would make the merger less anti-competitive.

AT&T said Monday that United States antitrust enforcers filed suit to block its merger with Time Warner, setting up a major court battle over the US$85 billion tie-up.

In the deal, AT&T seeks to vertically integrate its wireless and pay-TV capabilities with Time Warner's video content including Warner Bros. studios and cable channels such as HBO, CNN, TNT and TBS. The antitrust lawsuit announcement followed weeks of speculation that included reports the DOJ demanded AT&T and Time Warner sell Turner Broadcasting, which includes CNN. "It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy".

AT&T head lawyer David McAtee said so-called vertical mergers, between companies that are not direct competitors, are routinely approved. Historically, it's rare for the government to successfully block vertical mergers.

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Mark Cuban thinks the big losers of the DOJ's decision to sue to block the AT&T-Time Warner merger will be Google and Facebook. AT&T Chief Executive Officer Randall Stephenson countered those reports the next day, saying he'd never been under pressure from the DOJ to sell CNN.

Consumer advocates have also been advocating against the approval of the merger, warning about the harms of continued consolidation in the telecom and media industries.

By testing the arrangement, the Justice Department is adopting a starkly unique strategy to antitrust issues than the Obama organization did.

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