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AP

Brazil's antitrust authority said the merger of AT&T and Time Warner should not be allowed to go through unless the companies agree to changes, such divesting certain assets, to prevent the combined company from hurting competition.

Why it matters: Brazil is one of the remaining countries (along with the U.S.) that needs to sign off on the $85 billion deal, which has gotten regulatory authority from 16 countries. While it's hard to know how the recommendation will impact the U.S. review, it will likely be noticed by the Department of Justice since critics of the deal have drawn parallels in the U.S. market.

"I think this will harden any existing concerns DOJ has about the deal," said Gene Kimmelman, former DOJ official who is now CEO of Public Knowledge, an opponent of the merger.

Specifics: "The new company would also have the capacity and incentives to take various forms of discrimination against its competitors in both markets, which could weaken the competitive environment." the Brazilian antitrust authority, known as CADE, said in a statement Tuesday, according to a translation by the FT.

  • CADE also said the proposed deal would allow Time Warner to gain access to sensitive information from all its competitors through Sky (one of Brazil's biggest operators, of which AT&T owns a 93% stake, according to Bloomberg).
  • And AT&T would have access to conditions negotiated by its rivals through Time Warner (one of Brazil's largest pay-TV programmers), "significantly harming businesses and consumers in the pay-TV segment."

In the U.S. A coalition of public interest and consumer groups made a similar argument in a letter to the DOJ last month:

"As both a major programmer and a major distributor, it would be able to use information from both sides of the negotiating table to give itself better deals than its rivals can obtain—it would necessarily know, for instance, what its programming rivals are charging for their content, and what its distribution rivals are paying."

AT&T disagrees: AT&T says the deal benefits consumers by providing more content options and will no have anti-competitive impacts on the market. "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.

What's next: In Brazil, a decision is expected in November, although that deadline could slip up to 90 days. In the U.S., authorities are reportedly pretty far along in the review and are discussing conditions with the companies, according to WSJ, indicating that the deal is on the path to approval. Chile also must finalize its regulatory review. AT&T still expects the deal to close by the end of the year.

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Rep. Lou Correa tests positive for COVID-19

Lou Correa. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

Rep. Lou Correa (D-Calif.) announced on Saturday that he has tested positive for the coronavirus.

Why it matters: Correa is the latest Democratic lawmaker to share his positive test results after last week's deadly Capitol riot. Correa did not shelter in the designated safe zone with his congressional colleagues during the siege, per a spokesperson, instead staying outside to help Capitol Police.

Far-right figure "Baked Alaska" arrested for involvement in Capitol siege

Photo: Shay Horse/NurPhoto via Getty Images

The FBI arrested far-right media figure Tim Gionet, known as "Baked Alaska," on Saturday for his involvement in last week's Capitol riot, according to a statement of facts filed in the U.S. District Court in the District of Columbia.

The state of play: Gionet was arrested in Houston on charges related to disorderly or disruptive conduct on the Capitol grounds or in any of the Capitol buildings with the intent to impede, disrupt, or disturb the orderly conduct of a session, per AP.