Justice Department suing AT&T to block purchase of Time Warner

Justice Department suing AT&T to block purchase of Time Warner

The Justice Department on Monday sued to hinder AT&T's $85.4 billion offer for Time Warner, setting up a standoff over the main blockbuster obtaining to precede the Trump organization.

"The combination of AT&T [and] DirectTV's vast distribution infrastructure, and Time Warner's extremely popular television programming would be one of the largest mergers in American history", the official added.

The Justice Department argued that AT&T would use Time Warner's films and movies to force rival pay-TV companies to pay "hundreds of millions of dollars more per year for Time Warner's networks" in its lawsuit filed late Monday in federal court in Washington.

On Monday, AT&T's general counsel David McAtee called the DOJ lawsuit "a radical and inexplicable departure from decades of antitrust precedent".

Some news reports have said DOJ would only allow the merger if AT&T disposed of either DirecTV or Turner Broadcasting, including CNN. A similar Comcast/NBC Universal merger in 2011 went through with some conditions attached. "We see no legitimate reason for our merger to be treated differently".

Time Warner's shares dropped 1.1 percent to close at $87.71, while AT&T shares closed up 0.4 percent at $34.64.

By testing the arrangement, the Justice Department is adopting a starkly unique strategy to antitrust issues than the Obama organization did.

AT&T's CEO Randall Stephenson, however, has countered that notion and said he was never under pressure to spin off CNN. "We are confident that the court will reject the government's claims and permit this merger under longstanding legal precedent".