Justice Department Pushes Anti-Trust Suit Over Time Warner Deal

WASHINGTON, DC — The Justice Department is moving to block the $85 billion purchase of Time Warner by AT&T, a major potential merger in the media and telecommunications sector that could have industry-wide effects. The DOJ is citing the interest of consumers as its primary reason for pushing an anti-trust suit to stall the deal.

Officials worry the merger would "substantially lessen competition, resulting in higher prices and less innovation for millions of Americans."

In a statement, AT&T's Senior Executive Vice President David McAtee II said the DOJ's lawsuit was "radical and inexplicable."

"Our merger combines Time Warner's content and talent with AT&T's TV, wireless and broadband distribution platforms," he continued. "The result will make television more affordable innovative, interactive and mobile. Fortunately, the Department of Justice doesn't have the final say in this matter."

If AT&T is not able to satisfy the department's concerns, the matter is likely to end up in court. McAtee said he was confident the company would prevail before a judge.

The government's objections to the deal have surprised many on Wall Street. AT&T and Time Warner are not direct competitors. Mergers between such companies have typically had an easier time winning government approval.

AT&T would be able charge rival distributors such as cable companies "hundreds of millions of dollars more per year" for Time Warner's networks, the department charged in a press release.

Those payments are ultimately passed down to consumers through their cable bills. The government also said the combined company would use its power to slow the TV industry's shift to new ways of watching video online. Web TV services are cheaper than traditional cable.

Some were surprised about the decision, given that the Republican Party is in control of the White House. Traditionally, Republican administrations have been less inclined to aggressively use anti-trust law, a cause that had recently been championed by some Democrats in recent years.

AT&T CEO Randall Stephenson said earlier this month that he would not sell "key franchises" of Time Warner to get the deal done. A person familiar with the matter, who could not go on record, had previously told the AP that DOJ wanted the company to sell either Turner, the parent of CNN, TBS and other networks, or DirecTV.

President Trump's personal feud with CNN, which is owned by Time Warner, has cast a shadow over the DOJ's involvement in the merger. While officials have said the Trump has not been personally involved in the department's work on this case, critics have said that the mere appearance of the government's law enforcement arm working to punish a media company for its political reporting could have a chilling effect.

Watch: DOJ sues AT&T to prevent acquisition of Time Warner

The Associated Press contributed to this report.

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