A federal judge has temporarily blocked a proposed merger between Paramount and Warner Bros. Discovery, granting a request from a coalition of states seeking more time to challenge the $110 billion deal in court.
On Monday, U.S. District Judge Araceli Martínez-Olguín of the Northern District of California issued an order preventing the companies from finalizing the transaction for at least 14 days. The order could be extended for up to 28 days.
The move grants the court an opportunity to consider whether a longer injunction should remain in place while the broader antitrust lawsuit moves forward.
“This is a critical first win in our case to ensure this mega-merger never sees the light of day,” California Attorney General Rob Bonta said in a statement.
“History tells the tale of what happens when a few people have great power over markets that are central to Americans’ lives: fewer opportunities for more people, worse products and services for all people.”
The group claims that the merger could ultimately lead to higher prices, fewer choices for consumers, and diminished competition throughout the media industry.
“The lawsuit filed by the state attorneys general, in the most generous light, reflects a fundamentally flawed application of the antitrust laws and is wrong on both the facts and the law,” a Paramount spokesperson told The Epoch Times in response to the suit.
“We will vigorously defend the transaction and demonstrate that this challenge is inconsistent with sound competition policy and the competitive realities of the media marketplace.
“Delaying this transaction will only harm entertainment workers who have already suffered over recent years as technology has disrupted their livelihood and cost California tens of thousands of entertainment jobs.”
The lawsuit was also backed by Democratic attorneys general from Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington.
Together with Bonta, they argue the proposed merger violates Section 7 of the Clayton Antitrust Act of 1914, which prohibits acquisitions that are likely to substantially reduce competition.
A preliminary injunction hearing is set to be held on Aug. 3, where attorneys for both sides are expected to present arguments over whether the merger should remain on hold throughout the litigation.