DOJ Sues To Stop AT&T, Time-Warner Merger

The Justice Department sued on Monday to block AT&T's merger with Time Warner, calling it an "illegal" combination that harms consumers and stifles innovation, DOJ officials said.

AT&T and Time Warner announced their $85 billion merger last year, but the closing has been dragged out by the government's antitrust review.

CNBC reports it is the latest salvo in a drama more than one year in the making. Earlier this month, reports circulated that the government had demanded AT&T sell Turner Broadcasting, operator of the CNN news network, or DirectTV as a condition of approval, though the government pushed back at those reports.

A Justice Department official told reporters on Monday that the merger would raise prices for consumers and potentially block creators of media content from distributing their product without paying more money. Time Warner owns various networks in addition to CNN, including TBS, TNT and Cartoon Network. It also has lucrative sports broadcasting deals.

The government was also working to get state attorneys general to support a lawsuit, but so far none has signed on, the Justice official said on Monday.


Faber on DOJ blocking AT&T/Time Warner merger: DOJ officials are confident they will prevail in court from CNBC.


In a statement on Monday, AT&T's general counsel, David McAtee, said, "Today's DOJ lawsuit is a radical and inexplicable departure from decades of antitrust precedent. Vertical mergers like this one are routinely approved because they benefit consumers without removing any competitor from the market. We see no legitimate reason for our merger to be treated differently."

The lawsuit says the merged company would have the power to make its video distributor rivals less competitive by raising their costs, which would be passed on to consumers. The merged firm could also hinder the growth of online distributors that it sees as a threat to the pay-TV model.

DOJ sues to stop AT&T, Time Warner merger by CNBC.com on Scribd

The Justice Department has disputed it made the sale of Turner Broadcasting or CNN a condition of approval. A Justice Department official said Monday that the government made a "good faith" effort to resolve the harm to competition while allowing significant parts of the deal to move forward.

Stephenson said during the press conference that a sale of CNN was a "nonstarter," adding that the company was confident it would not have to sell any assets.