The US Department of Justice has filed a lawsuit to block telecoms giant AT&T’s acquisition of Time Warner, the owner of CNN and HBO.
The department said the merger would reduce competition and lead to higher consumer prices.

AT&T vowed to fight the move, calling it a radical departure from US competition practice.

US President Donald Trump objected to the deal during his campaign last year, fuelling the controversy.

AT&T chief executive Randall Stephenson said he thought the acquisition had been on a good path “until recently”.

He referred to concerns about possible political influence as the “elephant in the room”. President Trump is a vocal critic of CNN which is owned by Time Warner.

Mr Stephenson said: “There’s been a lot of reporting and speculation whether this is all about CNN. And frankly I don’t know. Nobody should be surprised the question keeps coming up.”

‘Higher bills’
In its lawsuit, the Department of Justice claimed that the deal – valued at more than $85bn when it was announced last year – would harm American consumers.

Assistant attorney general Makan Delrahim of the Department of Justice’s antitrust division, said: “It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy.”

He said the combination would hurt the emergence of new online television options and give AT&T the power to force rival pay TV companies to pay “hundreds of millions of dollars more” for Time Warner content.

The department has also denied political interference.

The decision to take legal action sets up a high-profile fight over US anti-trust law, which has rarely been tested in cases involving companies that do not directly compete.

‘Concentration of power’
George Hay, a professor of law and economics at Cornell, said there was “no question” the merger’s potential competitive impact merited serious review.

However, he said the lawsuit was noteworthy given the president’s comments during the presidential campaign.

“There would be nothing unusual if you didn’t have all of this political background,” he said.

Source: BBC