AT&T hit with antitrust lawsuit over Time Warner deal

AT&T hit with antitrust lawsuit over Time Warner deal

The U.S. Justice Department is poised to sue to block AT&T's $85.4 billion takeover of Time Warner, according to a person familiar with the matter, culminating more than a week of sparring over the deal and dealing a major blow to the carrier's bid to create a media and telecommunications empire, Bloomberg News' Sara Forden and David McLaughlin report.

Audio will be available later today.

AT&T responded in a statement, calling the lawsuit "a radical and inexplicable departure from decades of antitrust precedent". AT&T and Time Warner are not direct competitors.

AT&T reaffirmed its plans to challenge the government's lawsuit, arguing that its plan is a "vertical" merger without competitive overlap. "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.

The lawsuit also said AT&T and Comcast, which control nearly half of the pay-TV market, "would have an increased incentive and ability to harm competition by impending online competitors they consider a threat".

The move may be a pointer that the Trump administration will look closely at other big merger deals. "We see no legitimate reason for our merger to be treated differently".

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The DOJ announced Monday that it would sue to block the deal.

AT&T's CEO Randall Stephenson, however, has countered that notion and said he was never under pressure to spin off CNN.

During his campaign, Trump said that reporters had covered him unfairly and has continued to attack CNN as president, which he has labeled as "fake news".

An AT&T spokesman did not immediately respond to a request for comment.

The Justice Department official also warned that such a merger could allow AT&T to slow down advances in technology that would cut costs for consumers.

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