Brazil edges closer to final decision on AT&T-Time Warner merger


According to a report from Globo’s journalist Lauro Jardim, Brazil’s antitrust agency Cade will approve AT&T-Time Warner deal, with some restriction, during an October 18 meeting. The report does not offer any source or more specific details. Meanwhile, AT&T and Time Warner said the merger will not generate anti-competitive practices in the country.

In August, Cade’s General Superintendence (GS) said the operation cannot be approved “as presented” because it has the potential to result in anticompetitive practices. The final decision, however, is in charge of the court of the antitrust agency.

AT&T and Time Warner recently sent a document responding to this position in which they claimed that the GS “relied on incorrect interpretations” about the pay TV market. Time Warner claims that it has “less than 30% of the audience” (except in the children and film and series segments) and that HBO LAG has a third independent partner so “it cannot be used for alleged discrimination in relation to another suppliers”. In turn, AT&T said that Sky has less than 30% of the market and is at “deep disadvantage” compared to other competitors, as it cannot offer bundled offers.

Brazilian news site Tele.Síntense, citing market sources, reported that Cade’s restrictions are expected to be “softer” compared to the precautionary measure issued by Anatel last August preventing SKY and Time warner from sharing information until the end of the process.

On the other hand, Claro (América Móvil) also expressed its position regarding the process. The company questioned the GS’ hypothesis that both Claro and Sky could act in a coordinated manner because they have the same minority shareholder (Globo). In turn, the company said that OTT SVOD services have gained more subscribers than pay TV systems (citing Dataxis numbers in Q416 and Q117). In addition, the company considered that OTT platforms have been exerting and intensifying a “strong competitive pressure” on operators.