Time Warner´s Turner Broadcasting - which contains news network CNN - in order to win antitrust approval.
The move may be a sign that the Trump administration will look closely at other big mergers. Time Warner´s shares dropped 1.1 percent to close at $87.71, while AT&T shares closed up 0.4 percent at $34.64.The deal has been a political lightning rod since it was hatched in October 2016. During his campaign, Trump said that reporters covered him unfairly and has continued to attack CNN as president, which he has labeled as "fake news."
He has not commented on the AT&T deal since his inauguration in January. U.S. Attorney General Jeff Sessions declined to say last week if anyone from the White House had discussed the merger with any Justice Department officials.
The No.2 U.S. wireless carrier is trying to buy Time Warner, which also owns the premium channel HBO and movie studio Warner Bros, so it can bundle video entertainment on its mobile service.
The Justice Department´s lawsuit cited internal Time Warner documents that said long-term contracts to host live sporting events like college basketball and baseball would help allow it to achieve "targeted rate increases.
"The lawsuit also said AT&T and Comcast, which control almost half of the pay-TV market, "would have an increased incentive and ability to harm competition by impending online competitors they consider a threat."
The complaint´s focus on raising the costs of DirecTV´s rivals and hampering the move to online video is consistent with normal antitrust concerns, said Henry Su, a partner in the law firm Constantine Cannon.
"The theories that are being espoused (in the complaint) are not out on the edge or untested theories. They´re espousing what we consider traditional theories of vertical harm," said Su. "It doesn´t look like a stretch."
Aside from Trump and the Justice Department, the deal is also opposed by an array of consumer groups and smaller television networks. "Blocking this merger is the right thing to do - and we hope the Justice Department is doing it for the right reasons," said Craig Aaron, president of advocacy group Free Press, which opposes media industry consolidation.
Last week, the Justice Department had approached 18 state attorneys general asking them to join the challenge, but as of Monday none had publicly agreed to do so, Reuters reported. Democratic state attorneys general tend to join antitrust lawsuits and may be hesitant to work with Trump´s Justice Department while traditional Republican state attorneys general would be skeptical of a lawsuit to stop a vertical merger, said Seth Bloom, a veteran of the Justice Department who is now in private practice.
"In a complaint of this sort, it would be expected that state AGs would sign on to it," he said. "I don´t know if it ultimately will mean anything."