The decision came after 12 Democratic-led states, including Oregon and California, last week sued the company, alleging a merger would violate a federal law prohibiting mergers that lessen competition or create a monopoly. The states alleged a merger between the two media giants would eliminate competition in the film and cable industry and create a massive media company that would control nearly one-third of movies and cable programming in the U.S., resulting in higher prices, poorer quality media content and fewer movies and television shows.
U.S. District Judge Araceli Martínez-Olguín of the U.S. District Court for the Northern District of California granted the states their request for a temporary restraining order, which blocks the company from moving forward with a merger for 14 days while the states argue for a more permanent block.
Martínez-Olguín agreed with plaintiffs, saying a merger would likely violate antitrust laws.
“Here, Plaintiffs present compelling evidence that the combined firm resulting from the transaction will possess substantial market share in the wide-release theatrical distribution market,” she wrote in her decision.
The plaintiffs include the attorneys general of California, Oregon, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York and Washington
“This proposed merger could mean real harm for Oregonians — for working families who will see higher costs and fewer options, for the small businesses and workers in our film and TV industry and for our local movie theaters,” said Oregon Attorney General Dan Rayfield. “Pausing this merger now will keep irreversible harm from happening.”
The plaintiffs will argue for a preliminary injunction, which would block the merger for the remainder of the lawsuit, on Aug. 3 at the Oakland division of the U.S. District Court for the Northern District of California.
