The US Department of Justice has launched a probe into Netflix's proposed $82.7 billion acquisition of Warner Bros. Discovery, focusing on potential anticompetitive practices by the streaming giant. The investigation, reported by The Wall Street Journal, examines whether Netflix engaged in exclusionary conduct to entrench its market power.
Netflix announced its plans to acquire Warner Bros. Discovery in December, valuing the deal at $82.7 billion. The transaction is anticipated to close within 12 to 18 months, pending regulatory approvals. However, the Justice Department has initiated an early-stage investigation that could extend up to a year, with the authority to block the merger if anticompetitive issues are found.
According to a civil subpoena reviewed by The Wall Street Journal, the DOJ is scrutinizing "exclusionary conduct on the part of Netflix that would reasonably appear capable of entrenching market or monopoly power." This probe accompanies the standard merger review and aims to assess if Netflix has disadvantaged competitors unfairly.
Netflix's attorney, Steven Sunshine, described the inquiry as routine, stating to the Journal, "we have not been given any notice or seen any other sign that the DOJ is conducting a separate monopolization investigation." In a company statement, Netflix added that it is "constructively engaging with the Department of Justice as part of the standard review of our proposed acquisition of Warner Bros."
The outcome of this investigation may signal the DOJ's broader stance on media consolidations in the streaming sector, where concerns over market dominance have grown amid evolving competition.
