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Illustration: Rebecca Zisser / Axios

The U.S. Department of Justice is suing to prevent AT&T from completing its proposed $85 billion takeover of Time Warner, throwing the telecom giant's bet on becoming a media powerhouse in jeopardy. "Our investigation showed this is an illegal merger that would harm consumers," a DOJ official told reporters.

Why it matters: Antitrust regulators do not usually oppose so-called "vertical" mergers like this one, in which one company is buying another against which it doesn't really complete. But it is unclear if the change is philosophical, or related to President Trump's campaign statements against the deal and his subsequent criticism of Time Warner property CNN.

AT&T already was on record as saying it's ready to litigate, as it believes its future lies not only in distributing content, but also in producing it. The company's general counsel, David McAtee II, quickly said in a statement that the company is "confident" it will win in court. At a press conference after the suit was filed, CEO Randall Stephenson said the lawsuit pushed antitrust law past the "breaking point."

He also said AT&T won't sell CNN to get the deal approved. The DOJ official said earlier in the day that the White House had not communicated, to that person's knowledge, with the agency about the investigation.

Time Warner shares fell over 1% to close at $87.71 per share, compared to the $107.50 per share takeover price (which is to be paid in cash and stock).

The details:

  • AT&T's merger with Time Warner would result in higher prices and fewer options for consumers, the DOJ official said.
  • The DOJ official said that the combined company "would have the incentive and ability to charge more for Time Warner's popular networks" and that it could keep others out of the streaming video market.
  • The DOJ official said the agency remains open to finding an appropriate set of conditions to get the deal approved.
  • No state attorneys general have signed on to support the case. "We will prevail in court," said the DOJ official.

This post has been updated to incorporate the comments at AT&T's press conference.

Go deeper

Updated 5 hours ago - Sports

Olympics dashboard

Silver medalist Lilly King of Team USA (left) embraces gold medalist Tatjana Schoenmaker of Team South Africa on the podium during the medal ceremony for the Women's 200m breaststroke final on July 30. Photo: Clive Rose/Getty Images

πŸ₯‡ : U.S. gymnast Suni Lee wins gold in the women's individual all-around

πŸš£β€β™€οΈ: Team USA women's eight rowing fails to reach the podium

πŸ€ΈπŸΎβ€β™€οΈ: Simone Biles reacts to "love and support" after withdrawing from all-around gymnastics and team finals, citing her mental health

🏊: Olympic swimmer Ryan Murphy wins Silver in 200m

πŸ“·: In photos: Tokyo Olympics day 6 highlights

πŸ—“: The Olympic events to watch today

πŸƒβ€: Female Olympians push back against double standard in uniforms

Go deeper: Full Axios coverage

Former Michigan Sen. Carl Levin dies at 87

Sen. Carl Levin (D-MI) in 2014. He died Thursday. Photo: Win McNamee/Getty Images

Former U.S. Sen. Carl Levin (D-Mich.) died Thursday, his family and the Levin Center at Wayne Law β€” which bore his name β€” confirmed. He was 87.

Why it matters: The Detroit native served for 36 years in the U.S. Senate, serving twice as chairman of the Armed Services Committee and is credited with helping overturn the military's β€œDon’t Ask, Don’t Tell” rule.

Updated 6 hours ago - Politics & Policy

Military members will be included in Biden's new COVID guidance

Joe Biden. Photo: Anna Moneymaker/Getty Images

Members of the military will be required to get vaccinations or face regular testing, social distancing, mask mandates and restrictions on travel for work, the the Pentagon said on Thursday evening.

Why it matters: The policy was announced for federal workers and onsite contractors earlier on Thursday, part of several new Biden initiatives to get more Americans vaccinated and slow the spread of the Delta variant.