Justice Dept. to sue to stop AT&T's $85B Time Warner deal

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

The U.S. Justice Department filed a lawsuit Monday challenging a merger between AT&T Inc. and Time Warner Inc.

AT&T and Time Warner are not direct competitors, but the lawsuit alleges that the $108 billion acquisition would substantially lessen competition - allowing AT&T to have distribution control over Time Warner's popular television programming.

"This merger would greatly harm American consumers". More recently, deal progress was delayed as the DOJ antitrust head, Makan Delrahim worked with AT&T on competitive remedies.

"Today's DOJ lawsuit is a radical and inexplicable departure from decades of antitrust precedent", AT&T general counsel David McAfee said. The Obama administration approved a similar vertical deal in 2011 to allow cable company Comcast Corp to acquire NBCUniversal.

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The DoJ had been said to be mulling such an action since earlier this month, with some expressing concern that the move was politically motivated given President Donald Trump's intermittent social media attacks on CNN, Time Warner's flagship news network. "It is an insult to the career attorneys in the Justice Department to suggest that the decision to bring this suit was not based on the merits of the case", said Andrew Jay Schwartzman, veteran telecom observer now with the Georgetown University Law School.

"We see no legitimate reason for our merger to be treated differently", the statement said.

Time Warner's shares dropped 1.1 percent to close at $87.71, while AT&T shares closed up 0.4 percent at $34.64.

AT&T CEO Randall Stephenson said the idea his company would be too powerful after the deal "borders on the comical".

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