Ancine -the Brazilian National Film Agency- expressed its opposition to AT&T-Time Warner merger claiming that the agreement breaks the SeAC law but also could generate anti-competitive practices in the market.

The film agency expressed its position through a technical note sent to the Administrative Council of Economic Defense (Cade), which is analyzing the merger. If approved, AT&T would control the operations of DTH Sky and Time Warner’s content providers (Turner and HBO). However, the article 5 of Law 12.485/2011, known as the SeAC law, establishes limits to cross ownership between programming and distribution activities.

According to Ancine, this vertical integration could affect the smaller players in the market and impact on the prices and diversity of the services available. Ancine said the operation could result in the imposition of vertical restraints, such as price discrimination in the licensing of channels and limits on the access of competitors to pay TV packages, Teletime reported.

Cade requested the opinion from market regulators Anatel and Ancine. Although the board of Anatel has not yet pronounced, there are two opposing positions in the this agency: while the technical area considers that the merger does not break Article 5 because the companies are based outside the country, the Anatel prosecution believes it does break the law.

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