The judge also pointed to a sharp rise in concentration as measured in the Herfindahl-Hirschman Index (HHI), saying the HHI increase for Paramount/WBD exceeds the level necessary to show the merger is likely to enhance market power.
“Where plaintiffs demonstrate a presumption of illegality by way of undue market concentration, they need not offer ‘elaborate proof of market structure, market behavior, or probable anticompetitive effects’” to obtain a restraining order, Martínez-Olguín wrote.
The legal standard for issuing a temporary restraining order is the same as the one for issuing a preliminary injunction. Parties seeking either kind of preliminary relief must show a likelihood of success on the merits, a likelihood of irreparable harm in the absence of a court order, and that the order would be in the public interest.
Martínez-Olguín said the merger poses potential harms to the public, and that Paramount and WBD would not suffer any harm from having to wait a few months.
“Defendants will suffer no apparent harm in the near term if enjoined from consummating the Transaction—they concede that they will not begin to incur carrying costs for a delayed merger until the end of September 2026,” the order said. “Even if Defendants argued that they would suffer economic harm as a result of delaying the merger, the equities do not weigh in their favor when contrasted with the potential public harms that would result from consummation of the Transaction, including the loss of competition.”
Martínez-Olguín set a schedule for the sides to submit briefs and scheduled a hearing on a preliminary injunction for August 3. Paramount can challenge the district court’s rulings in the US Court of Appeals for the 9th Circuit. It is likely to do so if Martínez-Olguín maintains that the merger cannot be completed until after a trial.
