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The U.S. Department of Justice is investigating whether Netflix employed anti-competitive tactics in connection with its proposed $82.7 billion acquisition of Warner Bros Discovery’s studios and streaming service, according to a Wall Street Journal report published Friday. The Netflix Warner Bros acquisition probe marks a significant development in what would be one of the largest media mergers in history, as regulators examine potential monopolization concerns alongside standard merger review processes.
In a civil subpoena obtained by the Wall Street Journal, the department requested another entertainment company to describe any exclusionary conduct by Netflix that could entrench market or monopoly power. The investigation remains at an early stage, according to the report.
What Regulators Are Examining in the Netflix Warner Bros Acquisition
The Department of Justice inquiry focuses on whether the proposed deal could harm competition within the entertainment industry. According to the Wall Street Journal, the subpoena asked how previous mergers of studios or distributors affected competition for creative talent and requested details on how talent contracts differ between studios.
Netflix and rival bidder Paramount Skydance are both pursuing Warner Bros for its prominent film and television studios, extensive content library, and valuable franchises including “Game of Thrones,” “Harry Potter,” and DC Comics superheroes Batman and Superman. These assets would significantly expand either company’s streaming content portfolio and market position.
Netflix Responds to Investigation Reports
A Netflix spokesperson told Reuters the company is “not aware of any investigation into our business outside of the standard merger review process.” The streaming giant emphasized it was “constructively engaging” with the DOJ as part of routine review procedures for the proposed deal.
Steven Sunshine, a lawyer representing Netflix, stated the company believes the department is conducting standard merger review. “We have not been given any notice or seen any other sign that the DOJ is conducting a separate monopolization investigation,” Sunshine said.
Competing Bid Faces Similar Scrutiny
Meanwhile, the Department of Justice is also reviewing Paramount’s competing acquisition proposal, which Warner Bros’ board unanimously rejected as “inadequate” and “not in the best interests” of shareholders. Bloomberg News reported late Friday that Paramount is pushing to conclude the DOJ’s review of its tender offer within the next few weeks.
According to Bloomberg sources, Paramount has been providing requested information to the government. Once that process concludes, a 10-day waiting period will begin for the DOJ to decide whether to challenge the proposal on antitrust grounds.
Congressional and International Concerns
Additionally, Netflix co-CEO Ted Sarandos faced questioning from U.S. senators at a hearing Tuesday regarding how the potential streaming merger would affect competition across the entertainment industry. The scrutiny reflects broader concerns about media consolidation and market power concentration.
However, regulatory challenges extend beyond American borders. More than a dozen British politicians and former policymakers have called on the UK’s competition watchdog to launch a full review of the Netflix Warner Bros acquisition. Furthermore, Bloomberg News reported last month that European Union antitrust regulators are expected to scrutinize rival bids by Netflix and Paramount Skydance simultaneously.
The Department of Justice, Paramount, and Warner Bros did not immediately respond to Reuters requests for comment on the investigation. The timeline for completing the DOJ’s review remains uncertain, though Paramount’s accelerated review process could provide initial signals about regulatory concerns in the coming weeks.
