Antitrust Alarm Bells: DOJ Probes Netflix’s $82.7 Billion Warner Bros. Discovery Merger

The streaming world is abuzz, but not just with new releases. Netflix’s ambitious $82.7 billion bid to acquire Warner Bros. Discovery is facing intense scrutiny from the US Department of Justice (DOJ), with a particular focus on whether the streaming titan has engaged in anticompetitive practices.

DOJ Launches Antitrust Probe into Netflix’s Conduct

As initially revealed by The Wall Street Journal, the DOJ has initiated a civil subpoena as part of its review of the proposed merger. However, the probe extends beyond a standard merger assessment, delving into “exclusionary conduct on the part of Netflix that would reasonably appear capable of entrenching market or monopoly power.” This suggests a deeper interest in Netflix’s past and present market strategies, rather than solely the implications of the future combined entity.

A Mega-Merger Under the Microscope

The acquisition, announced in December and valued at a staggering $82.7 billion, was projected to finalize within 12 to 18 months, contingent on securing all necessary regulatory approvals. The DOJ wields significant power, capable of blocking the entire transaction if it finds sufficient evidence of market distortion. This investigation could signal a more aggressive stance from the agency, aiming to ensure a level playing field in the increasingly competitive streaming landscape.

Netflix Responds to Scrutiny

In response to the unfolding investigation, Netflix’s attorney, Steven Sunshine, affirmed to the WSJ that such probes are standard procedure. He stated, “we have not been given any notice or seen any other sign that the DOJ is conducting a separate monopolization investigation.” Furthermore, Netflix issued a statement confirming its constructive engagement with the Department of Justice, emphasizing that this is “part of the standard review of our proposed acquisition of Warner Bros.”

While Netflix maintains that this is routine, the inquiry’s specific focus on potential “exclusionary conduct” elevates its significance. The Wall Street Journal reports that the investigation remains in its nascent stages and could extend for up to a year, leaving the future of the colossal merger hanging in the balance.

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