Brazil: Watchdog says AT&T/Time Warner deal a high risk to competition

Brazilian regulators have raised the red flag on AT&T’s proposed Time Warner merger, saying the deal poses risks to competition.

In a decision released Tuesday, August 22, the country’s antitrust branch, Cade, indicated the transaction would align the interests of two significant market powers and create incentives for the combined company to corner the licensing and programming market. The report was first covered by Bloomberg.

According to Cade, the transaction would give both Time Warner and AT&T (along with its Brazilian arm, Sky) access to sensitive information from their competitors, including details like negotiated conditions. That in turn would give the combined entity the “capacity and incentives” to discriminate against competitors in both markets, thus weakening competition overall. Cade said it did not assess the legality of the transaction, but only its impact on the competitive environment.

The regulator has referred the matter to its board, which can request remedies to alleviate the competitive concerns. By law, the agency has until November 22 to pass along its final decision and any conditions, though a 90-day extension past that date can be granted.

The news comes amid reports that AT&T is working through similar concerns with the US Department of Justice.

Full Content: Bloomberg

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