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.

Go deeper

Updated 8 mins ago - World

China says U.S. is "endangering peace" with high-level visit to Taiwan

Health and Human Services Secretary Alex Azar during a June briefing in Washington, DC. Photo: Joshua Roberts/Getty Images

Health and Human Services Secretary Alex Azar announced Tuesday night he will lead a delegation to Taiwan "in the coming days."

Why it matters: It's the highest-level visit by a U.S. cabinet official to Taiwan since 1979. Azar is also the first U.S. Cabinet member to visit the island state in six years. The visit has angered China, which views Taiwan as part of its territory. Chinese officials accused the U.S. early Wednesday of "endangering peace" with the visit, AFP reports.

Updated 53 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3:30 a.m. ET: 18,543,662 — Total deaths: 700,714 — Total recoveries — 11,143,031Map.
  2. U.S.: Total confirmed cases as of 3:30 a.m. ET: 4,771,236 — Total deaths: 156,807 — Total recoveries: 1,528,979 — Total tests: 57,543,852Map.
  3. States: New York City health commissioner resigns in protest of De Blasio's coronavirus response — Local governments go to war over schools.
  4. Public health: 59% of Americans support nationwide 2-week stay-at-home order in NPR poll.
  5. Politics: Trump's national security adviser returns to work after coronavirus recovery Republicans push to expand small business loan program.
  6. Sports: Indy 500 to be held without fansRafael Nadal opts out of U.S. Open.
Updated 2 hours ago - World

At least 100 killed, 4,000 injured after massive explosion rocks Beirut

Photo: Anwar Amro/AFP via Getty Images

A major explosion has slammed central Beirut, Lebanon, damaging buildings as far as several miles away and injuring scores of people.

Driving the news: At least 100 people have been killed and over 4,000 injured in the blast — and the death toll is likely to rise, the Lebanese Red Cross said, per AP. Prime Minister Hassan Diab said the explosions occurred at a warehouse that had been storing 2,750 tons of ammonium nitrate for the past six years.