Netflix's proposed acquisition of Warner Bros. Discovery for approximately $83 billion is facing an antitrust review by the U.S. government, while Paramount Global continues to pursue a competing offer for the Hollywood media giant. According to individuals familiar with the matter, antitrust enforcers at the U.S. Department of Justice are inquiring with industry participants. They are investigating whether Netflix could attain monopolistic market power by acquiring Warner Bros.' film and television production and streaming assets, in order to assess the competitive risks posed by the transaction. Netflix stated that it is "not aware of any investigation into its business beyond the standard merger review process" and added that it is engaging in constructive dialogue with the Department of Justice regarding the review of the proposed deal. A Warner Bros. spokesperson said, "We are confident that this acquisition by Netflix will meet all regulatory approval conditions." The sources indicated that the Justice Department's review is being conducted under Section 2 of the Sherman Antitrust Act and Section 7 of the Clayton Act. The former prohibits unlawful monopolization, while the latter explicitly forbids transactions that may substantially lessen competition, a common legal basis for reviewing proposed mergers. Historically, enforcement under Section 2 of the Sherman Act has been less frequent, but antitrust agencies have recently revived its use for relevant reviews. Such antitrust scrutiny does not inevitably lead to litigation, and the acquisition offer from Paramount is also expected to undergo similar antitrust checks. Although Netflix currently holds an advantage over Paramount in the bidding for Warner Bros., Paramount, backed by Oracle billionaire Larry Ellison, has not given up. It has not only launched a hostile takeover bid for Warner but also threatened last month to initiate a proxy fight to reconstitute Warner's board of directors. Netflix accused Paramount of "misrepresenting" the nature of this regulatory review process, stating in a release, "We anticipate they will continue to prioritize appearances over substantive outcomes." Netflix's lawyer, Steven Sunshine, added that the company "has not received any notice, nor seen any indication, that the Department of Justice is conducting a separate monopolization conduct investigation." This week, Netflix's co-CEO appeared before a relevant U.S. Senate hearing to defend the proposed merger. However, lawmakers expressed skepticism towards the streaming giant's assertion that the deal "would not give it excessive market power." During the hearing, Democratic Senator Cory Booker of New Jersey stated his concern that the acquisition by Netflix could "grant it greater control over consumers and lead to a significant reduction in streaming platforms and alternatives in the market." The proposed deal has also faced opposition from some quarters within Hollywood, including the Writers Guild of America, which has explicitly stated that "this deal must be stopped." Paramount CEO David Ellison was invited to attend the same hearing but declined. The Department of Justice is also reviewing Paramount's proposal to acquire Warner Bros., despite Warner's board having repeatedly rejected Paramount's offers. Former U.S. President Donald Trump has commented multiple times on the battle for Warner Bros. He said in December that Netflix already possesses a "very high market share, which would increase significantly with the acquisition of Warner Bros.," adding that "this could become a problem." Trump stated, "I have decided not to get involved; the matter will be handled entirely by the Department of Justice."
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