Judge temporarily halts Paramount-Warner Bros. merger over antitrust concerns

• Twelve states argue the deal would reduce competition.
• California calls the ruling a "critical first win."
• Paramount says the merger is lawful and pro-competitive.

A federal judge has temporarily halted the proposed merger between Paramount and Warner Bros. after a coalition of 12 US states argued the deal would violate federal antitrust law.

As reported by Variety, Judge Araceli Martinez-Olguin granted a 14-day temporary restraining order, ruling that the states had raised serious questions about the legality of the transaction. 

The order preserves the status quo while the court considers a request for a preliminary injunction that could block the merger until the lawsuit is resolved.

The judge also scheduled a hearing on the preliminary injunction for August 3rd, although the date could change if both parties agree.

Legal challenge

California Attorney General Rob Bonta described the ruling as a "critical first win," arguing the merger would concentrate too much power in the entertainment industry. 

“With our lawsuit, we’re fighting for a free and fair market and a thriving film and television industry that serves creatives and audiences alike," said Bonta. “We have a full tank of gas, the law on our side, and look forward to continuing to make our case.”

Paramount, however, welcomed the temporary order, saying it allows the court to examine the antitrust issues while maintaining that the merger is lawful, pro-competitive and would benefit consumers, creators, workers and the wider industry.

“This merger is lawful, pro-competitive, and will benefit consumers, creators, workers, and the entertainment industry," said a Paramount spokesperson. “We will continue to vigorously defend the transaction and will look forward to the hearings on the substance of the State AGs’ action.” 

The states argue the merger would combine two of the leading cable programmers and two of the top film distributors, harming competition in both markets. 

Paramount has since disputed those claims, citing increased competition from newer studios and arguing the deal would strengthen its position in streaming. The judge, however, said efficiencies in one market cannot offset alleged competitive harm in another.