The merger agreement between Paramount and Warner Bros. has been stopped by a judge

A US federal judge has temporarily blocked a proposed $110bn (£85bn) merger between media giants Paramount Skydance and Warner Bros Discovery.

The decision a A lawsuit filed by a coalition of 12 US statesStates including California and New York are aiming to end the deal, which would stifle competition and raise prices for consumers.

Prosecutors representing the states said merging the two major studios would “cause significant harm to movie theaters, basic cable distributors and, ultimately, audiences nationwide.”

In response, the media giants argued that the regions had misread the market and that consolidation would improve streaming efficiency.

U.S. District Judge Araceli Martinez-Holguin issued a temporary restraining order following legal arguments heard last week.

Under the 14-day order, neither company can complete the deal or start merging the businesses.

In her ruling, the judge noted that the state coalition raised “serious questions” about the deal’s impact on film distribution.

She warned that allowing the merger to proceed now would “make it extremely difficult to crack the egg” if the court later decided to block it all together.

Judge Martínez-Holguín rejected the companies’ argument that the “overwhelming public interest in antitrust enforcement” underscored the merger more than any temporary delay.

While the legal proceedings continue, she said, Paramount and Warner Bros. “will continue to operate as successful companies that compete in a diverse and competitive marketplace.”