The Justice Department intends to sue AT&T to stop its $85 billion purchase of Time Warner, according to a person familiar with the matter who was not authorized to discuss the matter ahead of the suit's official filing.
The lawsuit is the first major challenge to a merger by the administration of U.S. President Donald Trump, who has repeatedly criticized Time Warner's CNN news unit and announced his opposition to the deal a year ago, saying it would concentrate too much power in AT&T's hands.
"This merger would greatly harm American consumers", Assistant Attorney General Makan Delrahim of the DOJ's antitrust division said in a statement.
The US Department of Justice will reportedly file an antitrust lawsuit against AT&T with regards to its proposed acquisition of Time Warner.
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AT&T head lawyer David McAtee said so-called vertical mergers, between companies that are not direct competitors, are routinely approved. 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. A similar Comcast/NBC Universal merger in 2011 went through with some conditions attached.
That "combined power" would let AT&T "use its control over Time Warner's popular and valuable networks to hinder its rivals, by forcing them to pay hundreds of millions of dollars more per year for the right to distribute those networks", the official said.
The Trump administration has had a strained relationship with the news network. 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.