Netflix presented this Friday a US$72 billion offer to buy the studios and streaming division of Warner Bros Discovery, stating that the deal is in line with the priorities of United States competition authorities.
Netflix executives claim the transaction will give the company’s 300 million subscribers ‘more bang for the buck’ by adding more content to its platform.
But even before it was announced, Netflix’s defense of the deal faced criticism from Republicans in the US Congress, who warned that Netflix, by absorbing content rights from HBO Max and Warner Bros, will reduce options for consumers. Furthermore, parliamentarians claim that the deal will give Netflix an unacceptably high share of the streaming market.
U.S. Sen. Mike Lee, a Utah Republican who leads the U.S. Senate’s antitrust committee, said Wednesday that Netflix’s purchase of Warner Bros. Discovery’s streaming assets “should alarm antitrust authorities around the world.”
“Netflix created a great service, but increasing Netflix’s dominance in this way will mean the end of the Golden Age of streaming for content creators and consumers,” Lee wrote on social media site X.
Last month, Republican Sen. Roger Marshall of Kansas and Rep. Darrell Issa of California also called on U.S. antitrust authorities to scrutinize the deal, saying a lack of competitive pressure will encourage Netflix to produce and release fewer films in theaters.
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The deal, because of its size, will likely face significant antitrust scrutiny from the U.S. Department of Justice, and also because the addition of HBO Max’s 128 million subscribers to Netflix’s more than 300 million will create a formidable group in the industry.
That said, Netflix may point to changing media consumption habits and the fact that Alphabet’s YouTube has recently been the most popular way for Americans to watch TV.
Although Netflix submitted the highest bid for the studio and streaming assets, it has been the political underdog compared to David Ellison-led Paramount Skydance, which has close ties to the Trump administration.
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‘We are very confident in the regulatory process. This deal is pro-consumer, pro-innovation, pro-worker, pro-creator, pro-growth,” said Netflix chief executive Ted Sarandos after the deal was announced.
The US Department of Justice’s antitrust unit is led by Gail Slater, a former Fox and Roku executive. She later served as economic advisor to Vice President JD Vance and, since her confirmation, has spoken frequently about using antitrust law to protect American consumers, workers and innovation.
US President Donald Trump has a history of engaging in major media mergers and taking one side. He actively lobbied the Justice Department to block AT&T’s $85 billion purchase of Time-Warner, expressing concerns about media concentration and his own discontent with Time-Warner’s CNN news network. AT&T ended up winning in court in 2018 and 2019.
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