BRAZIL: Regulatory Agency Challenges Time Warner Acquisition By AT&T

(RTTNews) - Brazil's regulatory agency's superintendence-general referred to a court analysis, with a challenge recommendation, the transaction involving the acquisition of Time Warner by AT&T, owner of Sky in Brazil.

According to the decision, the operation is being considered as an act of concentration and can not be approved as presented. Now, the regulatory agency's court has to decide on the subject.

"Both Sky and Time Warner have significant market power. Such alignment would create incentives to close both the licensing/programming and the TV subscription markets, triggering competing concerns," said the regulatory agency's superintendence-general in its ruling.

The analysis also found that the "resulting structure of the transaction would allow Time Warner to gain access to sensitive information from all its competitors through Sky. Likewise, AT&T would have access to terms negotiated by its rivals through Time Warner."

Also, the ruling states that the new company would be capable of taking various forms of discrimination against its competitors in both markets.