Brazilian authorities have weighed in with antitrust concerns about the AT&T-Time Warner merger, according to deal critic Public Knowledge.
Such a finding would mean AT&T-DirecTV "would not be allowed to treat Time Warner assets as part of that company, but would need to deal with them at arms length," the group said.
Brazil's Administrative Council for Economic Defense (CADE) said the deal should be rejected unless some properties are divested, though it did not identify which, said Public Knowledge.
The CADE board still has to vote on that recommendation.
AT&T was putting the best face on it, including saying it would work with CADE to "clarify" any issues.
“The merger between AT&T and Time Warner has taken one more step in its path to conclusion in the Brazilian market," the telco said. "The CADE’s Superintendency referred the case to the Board for review. This means that the transaction will now be analyzed by the CADE’s body responsible for its final decision on the matter.
AT&T said it believes the union of the two players will not bring anti-competitive impacts to the market, but rather will benefit consumers as it will enlarge the options of content available to them and raise their access to information and entertainment. The combined companies will also contribute to market competitiveness, improving the offer of high-quality services to customers, and will stimulate the development of the audiovisual sector in Brazil.
AT&T said that of the 19 approvals it needs from 19 different countries, it has already gotten 16, with three pending -- Brazil, Chile and the United States.
Reports last week had the U.S. Justice Department reaching the home stretch of its antitrust review. The FCC is not conducting a public-interest review because the deal was structured so that it did not include any exchange of licenses.