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(Bloomberg) — Comcast Corp. and Time Warner Cable Inc. will meet with the U.S. Department of Justice this week to discuss their planned merger, and Comcast could ultimately walk away from the deal if concessions needed to win approval are too strict, according to people familiar with the matter.

Staff attorneys in the Justice Department’s antitrust division are preparing to recommend blocking the $45.2 billion deal on the grounds that the creation of a nationwide cable giant would hurt consumers, people familiar said last week.
The staff recommendations would be made to the division’s senior officials, who would then decide whether to file a federal lawsuit seeking to block the merger.

Comcast wouldn’t face a breakup fee if the deal, which the government has been reviewing for over a year, fell apart — a condition the company requested because of regulatory uncertainties from the outset. Wednesday’s meeting with the Justice Department may focus on Comcast’s involvement with the streaming video service Hulu, said the people, who asked not to be identified because the matter is not public. Time Warner Cable spokesman Bobby Amirshahi declined to comment Sunday about the company’s dealings with regulators. Telephone calls to Comcast weren’t immediately returned.

The Justice Department has been reviewing whether Comcast was too actively involved when co-investors 21st Century Fox Inc. and Walt Disney Co. tried to sell Hulu in 2013, said the people. Comcast agreed to be a passive investor in Hulu when it acquired a stake in the company via its purchase of NBCUniversal LLC. The Justice Department took depositions in February from Comcast executives about the attempted sale of Hulu, the people said. Comcast maintains that it wasn’t involved and that Disney made the decision to hold onto Hulu, they said. This week’s meeting between the companies and the Justice Department was first reported by the Wall Street Journal. A rejection of the deal would be a blow to Comcast, which has sought to expect in major cities including New York and Los Angeles, where Time Warner Cable is dominant.

–With assistance from Matthew Monks in New York.

To contact the reporter on this story: Alex Sherman in New York at asherman6@bloomberg.net To contact the editors responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net Ros Krasny, Bruce Rule