U.S. Senator Tim Scott (R-S.C.) has called for a thorough antitrust review of Netflix’s proposed acquisition of Warner Bros. Discovery. In a letter addressed to Department of Justice Assistant Attorney General for the Antitrust Division Gail Slater and Federal Trade Commission Chairman Andrew Ferguson, Scott expressed concerns about the impact of the deal on competition in both streaming and the broader movie industry.
“I write to express serious concerns about Netflix’s agreement to buy the streaming and studio assets of its competitor Warner Bros. Discovery. Such a transaction raises the prospect of significant antitrust problems in streaming and for the movie industry more broadly. The transaction warrants rigorous antitrust review under all applicable antitrust merger and monopolization laws and, to the extent appropriate, a lawsuit to block it,” Scott stated.
Scott noted that Netflix already leads its competitors in terms of subscribers, viewing time, and monthly visits. He warned that acquiring Warner Bros. Discovery could allow Netflix to increase prices, reduce consumer choice, and potentially entrench monopoly power. “In streaming, Netflix is already dominant, and its proposed acquisition of a key competitor (HBO) may be a pathway to increase prices for everyday Americans, reduce choice, and obtain or entrench monopoly power. Netflix currently outpaces all rivals in subscribers, viewing time, and monthly visits, and seems to have the power to increase prices regularly,” he wrote.
The senator also highlighted possible negative effects on various groups including paid streaming customers, moviegoers, content creators such as writers and producers, as well as brick-and-mortar movie theaters if Warner Bros. films become exclusive to Netflix’s platform. He raised concerns about fewer opportunities for talent in the entertainment industry due to reduced competition.
Scott questioned whether entering into this agreement could itself constitute monopolization under existing antitrust laws: “Finally, it deserves serious consideration whether the very act of entering into the agreement to buy Warner Bros. Discovery—in and of itself—constitutes a form of monopolization under the antitrust laws.” He suggested that if Netflix entered into this deal with expectations that regulatory hurdles would weaken Warner Bros., this could be seen as potentially unlawful conduct.
He referenced several industry voices sharing these worries:
– A Hollywood group described the deal as one that would “hold a noose around the theatrical marketplace.”
– The Writers Guild of America said it “must be blocked” because “the world’s largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent.”
– Michael O’Leary from Cinema United called it “an unprecedented threat” warning that “theaters will close, communities will suffer, jobs will be lost.”
– Lindsay Dougherty from Teamsters’ Motion Picture Division stated that further consolidation by Netflix would kill jobs while raising prices.
– The International Documentary Association warned that documentarians’ creative opportunities are at risk due to this merger.
Scott concluded his letter by urging regulators to evaluate carefully and act decisively regarding this proposed acquisition: “Therefore, given the level of concern and the potential for harm to competition, I urge you to carefully evaluate the proposed deal involving Netflix and Warner Bros. Discovery and to act decisively to prevent anticompetitive conduct in this vital sector.”
