The Justice Department has sued to block telecom giant AT&T's $85.4 billion bid for a merger with Time Warner. The merger was initially announced more than a year ago, but the DOJ's lawsuit was just filed on Monday.
According to
CNN Money, the DOJ argues that the deal violates antitrust law because it would result in AT&T using "its control of Time Warner's popular programming as a weapon to harm competition."
Time Warner's properties include HBO, Warner Bros., and Turner Broadcasting, which includes CNN and TNT.
“This merger would greatly harm American consumers,” Makan Delrahim, the assistant attorney general for antitrust,
said in a statement. “It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy.”
AT&T plans to fight the suit, and analysts believe the company has a good chance of prevailing.
"If this goes to court, we see AT&T prevailing," Cowen & Co. analyst Paul Gallant
said Tuesday in a research note. “DOJ always bears the burden in court. But here we believe it will face a higher-than-normal burden because it needs to explain its departure from longstanding clearance of vertical transaction."