Brazilian regulators have raised the red flag on AT&T’s proposed Time Warner merger, saying the deal poses risks to competition.

In a decision released Tuesday, the country’s antitrust branch – known as Cade – indicates the transaction would align the interests of two significant market powers and create incentives for the combined company to corner the licensing and programming market. The report was first flagged by Bloomberg.

According to Cade, the transaction would give both Time Warner and AT&T (along with it’s Brazilian arm, Sky) access to sensitive information from their competitors, including details like negotiated conditions. That in turn would give the combined entity the “capacity and incentives” to discriminate against competitors in both markets, thus weakening competition overall. Cade says it did not assess the legality of the transaction, but only its impact on the competitive environment.

Cade has referred the matter to its board, which can request remedies to alleviate the competitive concerns. By law, the agency has until November 22 to pass along its final decision and any conditions, though a 90-day extension past that date can be granted.

The news comes amid reports AT&T is working through similar concerns with the U.S. Department of Justice.

Last week, the Wall Street Journal indicated AT&T is making headway in its discussions with the DOJ. Talks have reportedly reached an “advanced stage” as the pair work to address key concerns including making sure the operator doesn’t favor its own content, and ensuring customer data is made available to competitors at a fair price. The details of the discussions are confidential, but AT&T General Counsel David McAtee commented at the time that the proceedings are “on track from our perspective.”

More on that here.