Brazil’s antitrust regulators say that AT&T’s proposed merger with Time Warner should not be approved out of anticompetitive concerns, unless the companies agree to changes.
The country says that in its current state, the $85 billion merger presents significant concerns for competitors as Time Warner already has a hold on large parts of the Brazilian market. AT&T already owns Sky Brasil, which makes up a large part of the Brazilian market as well.
CADE, the Brazilian antitrust authority, says merging the two could be harmful.
“Sky and Time Warner already have significant market power, such alignment would create incentives for closing in both the licensing and programming market, as well as operation of TV by subscription TV, generating competition concerns,” CADE said in a statement translated by Financial Times.
The regulatory body expressed concern that the “transaction would allow Time Warner to gain access to sensitive information from all its competitors through Sky,” weakening competition in the market.
“Likewise, AT&T would have access to conditions negotiated by its rivals through Time Warner,” CADE continued.
The regulator is looking into recommendations to curb potential anticompetitive ramifications that the deal could cause. AT&T says it disagrees with CADE’s assessment, but notes that it’s willing to work with the country on such potential conditions for a deal
“AT&T and Time Warner will work with CADE to clarify any issues they may have to promptly reach a final resolution on the matter,” the company said in a statement.
Brazil, along with the U.S., is one of the last countries remaining to approve the deal. Sixteen others have signed off on it. AT&T still expects the deal to close by the end of the year.
CADE plans to issue its final decision in late November, however it’s possible that the deadline could be extended by as much as three months.