The US Department of Justice has come out against AT&T's proposed takeover of Time Warner, saying the deal threatens competition. The DoJ is concerned that AT&T would increase prices for other TV providers to gain access to Time Warner's channels and programming or restrict access to the content in order to hinder newcomers in the pay-TV market.
The DoJ said other pay-TV providers could be forced to pay "hundreds of millions of dollars more per year" for the right to distribute Time Warner's channels such as CNN, TNT, TBS and HBO. The combined company could also use its increased power to slow the industry’s transition to new video distribution models, if AT&T restricts access to programming from Time Warner such as Game of Thrones or NCAA basketball.
AT&T expressed surprise at the decision, saying such vertical mergers had received regulatory clearance in the past. The DoJ must still argue its case at the US district court in Washington, and AT&T said it was confident that the court would allow the deal to go ahead.
AT&T had expected the takeover to close before the end of 2017. However, the company admitted earlier this month the closing was uncertain, as it was in talks with the DoJ still about regulatory clearance. Media reports suggested the two discussed possible remedies to alleviate the DoJ's concerns, but no such conditions have been announced.
