LOS ANGELES, California: California and 11 other states have filed a lawsuit seeking to block Paramount's proposed US$110 billion acquisition of Warner Bros. Discovery, arguing the deal would reduce competition in film distribution and cable television.

The lawsuit poses a significant challenge to Paramount Chief Executive David Ellison's plan to expand the company into a stronger rival to streaming giants Netflix and Disney.

California Attorney General Rob Bonta said the merger would harm competition and consumers. "With this lawsuit, California and our sister states are fighting for free and fair markets, not rigged markets. America has no kings in government or our economy," Bonta said in a statement.

According to the lawsuit, the combined company would control 27 percent of the U.S. film distribution market, 30 percent of blockbuster film distribution and 27 percent of the market for basic cable channels.

The states argue the merger would reduce competition, hurting movie theaters and pay television distributors.

A court ruling on the case is expected to take months, potentially delaying the transaction and costing Paramount hundreds of millions of dollars.

The proposed acquisition has also drawn opposition from actors, writers and theater owners, who fear the combination of Paramount Pictures and Warner Bros. could lead to job losses and fewer films reaching cinemas.

Paramount has defended the transaction, saying it would strengthen, rather than weaken, its film business after eliminating about $6 billion in overlapping infrastructure, marketing and corporate costs.

Ellison has said the combined studios would release 30 films annually.

The U.S. Department of Justice has already cleared the acquisition, concluding it does not raise competition concerns.

Larry Ellison, billionaire Oracle co-founder and father of Paramount CEO David Ellison, has developed ties with President Donald Trump, and Paramount has hired several former Trump administration officials.

Under the merger agreement, Paramount has committed to paying about $650 million in fees to Warner Bros. Discovery shareholders each quarter if the deal is not completed before October. The company has warned that prolonged delays could force it to renegotiate financing, create uncertainty around its share price or potentially derail the transaction altogether.