DOJ reviews Netflix’s proposed $82.7bn Warner Bros Discovery deal amid competition concerns

New Delhi: The US Department of Justice has begun examining whether Netflix’s proposed $82.7 billion acquisition of Warner Bros Discovery raises competition issues, according to news reports.

The review forms part of a broader assessment of consolidation in the entertainment industry and its implications for market power and access to creative talent.

As part of the process, a civil subpoena was issued to another entertainment company requesting information about any conduct that could have enabled Netflix to strengthen its market position.

Investigators are also gathering details on how previous studio mergers have influenced competition for writers, actors and other talent, as well as how contractual terms differ across the sector.

The department is assessing whether either the Netflix–Warner Bros Discovery transaction or a competing bid involving Paramount and Skydance could reduce competition in the market. The Paramount–Skydance proposal had previously been rejected by Warner Bros Discovery’s board, which described it as not serving shareholders’ interests.

Netflix said it is participating in what it described as the routine merger review process and is engaging with regulators. The company’s legal counsel stated that it has not received any indication that authorities have opened a wider monopolisation investigation.
The review remains at an early stage.

Separately, Paramount is reported to expect a decision on the government’s review of its tender offer within weeks, which could then trigger a statutory waiting period for any potential legal challenge from the Department of Justice.

The proposed transaction may also face scrutiny outside the United States. Authorities in the United Kingdom and the European Union have signalled interest in examining the competitive implications of both bids.

In Washington, Netflix co-chief executive Ted Sarandos was recently questioned by US senators on how the potential acquisition could affect competition across the entertainment landscape.

Former US president Donald Trump has indicated he would not intervene politically in the takeover contest, stating he intends to remain outside the process.