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DOJ Probes Netflix Warner Bros. Deal for Antitrust
7 Feb
Summary
- U.S. DOJ investigates Netflix's proposed $82.7B Warner Bros acquisition.
- Subpoena asks about exclusionary conduct and monopoly power.
- Paramount's bid for Warner Bros. was also reviewed and rejected.
The U.S. Department of Justice has initiated an investigation into Netflix's proposed $82.7 billion acquisition of Warner Bros. Studios and its streaming service. The probe is examining whether Netflix utilized anti-competitive strategies as part of the deal.
Evidence of this investigation surfaced via a civil subpoena issued to another entertainment company. The subpoena sought details on any "exclusionary conduct" by Netflix that might establish or maintain monopoly power. The DOJ is also reviewing Paramount's rejected bid for Warner Bros., which was deemed "inadequate" by the Warner Bros. board.
Netflix is reportedly engaging constructively with the DOJ, with a company spokesperson stating awareness only of a standard merger review process. Lawyers for Netflix believe the department is conducting a routine review, not a separate monopolization investigation.
The acquisition by Netflix or Paramount Skydance aims to secure Warner Bros.'s valuable film and television studios, extensive content library, and popular franchises. The DOJ's inquiry also extends to how past mergers have impacted competition for creative talent and contract variations among studios.
This potential deal faces scrutiny beyond the U.S., with British politicians urging a full review by the UK's competition watchdog. Additionally, the EU's antitrust regulators are expected to simultaneously review rival bids from Netflix and Paramount Skydance.
