Sen. Mike Lee (R-UT), who chairs the Senate Judiciary Committee’s antitrust subcommittee, is leading the growing Republican opposition to the proposed merger between Netflix and Warner Bros. Discovery.
Lee’s concerns about the antitrust implications of the pending purchase, should it proceed, underscore the importance of the regulatory approval process in this case.
Notably, Lee voiced his objections to the unprecedented Hollywood deal ahead of his subcommittee’s Feb. 3 hearing. The hearing is expected to feature testimony from Netflix co-CEO Ted Sarandos and Warner Bros. Chief Strategy Officer Bruce Campbell.
In a Thursday letter sent to the heads of both entertainment companies, the Republican chairman requested information on the Netflix-Warner Bros. merger due to several concerns.
“This merger raises concerns about potential abuse of the merger review process, particularly the exchange or misuse of competitively sensitive information and the competitive harm that can arise while a transaction remains under review,” Lee wrote. “I am also concerned that this proposed transaction could operate as a so-called ‘killer non-acquisition,’ effectively weakening a major competitor through the pendency of the merger review process.”
The letter did not explicitly name Paramount Skydance or its quest to outbid Netflix in buying Warner Bros., which has rejected Paramount’s offers several times.
“This transaction appears likely to raise serious antitrust issues, including the risk of substantially lessening competition in streaming markets,” Lee continued. “If consummated, the acquisition could eliminate a major competitor, consolidate control over an extensive content library, and increase bargaining power over creators and talent.”
Lee’s concerns were corroborated by a new report from the Digital Progress Institute, which warned that the “unlawful” and “anticompetitive” merger will impose higher streaming prices on consumers. The report argued the deal should be blocked by federal regulators because of this.
The Justice Department, particularly its Antitrust Division, and the Federal Trade Commission are the bodies with the power to approve the merger. Neither has commented on the deal yet, although President Donald Trump said he would be involved in the regulatory process.
The report was co-authored by DPI President Joel Thayer, who aligns with Trump’s policy goals, and former Colorado Rep. Ken Buck, a vocal GOP Trump critic during his decade in Congress.
Another point in Lee’s letter concerned Netflix’s recent deal with Sony, which makes the world’s leading streaming service the exclusive home for Sony’s films after their theatrical and home entertainment runs conclude.
“This arrangement brings additional high-value content behind the Netflix paywall and may further limit competing services’ ability to secure comparable offerings,” he said. “When considered with the WBD acquisition, these developments raise broader questions about cumulative content concentration and the potential for reduced competition across streaming markets.”
Among the eight questions he poses to Netflix and Warner Bros., Lee asks for confirmation that no Netflix personnel have gained or shared with Warner Bros. any “competitively sensitive information” from the streaming service’s licensing agreement with Sony.
The Utah Republican sent copies of his letter to Attorney General Pam Bondi and Antitrust Division Assistant Attorney General Abigail Slater.
Rep. Darrell Issa (R-CA) and Sen. Roger Marshall (R-KS) have raised similar antitrust concerns in their own letters to federal regulators since the bidding war for Warner Bros. started late last year.
Netflix remains confident its all-cash offer is the best bid despite the antitrust concerns raised by Congress and Paramount’s hostile takeover. Sarandos will likely relay that message to lawmakers at the Feb. 3 congressional hearing.
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The Netflix-Warner Bros. deal is also facing scrutiny from the United Kingdom, where a bipartisan coalition of lawmakers asked the country’s leading antitrust authority to investigate the merger.
The European Union may also weigh in on the merger, which must be approved in other countries besides the United States before it can be finalized. Paramount executives reportedly met with French President Emmanuel Macron and British officials to seek their help in blocking the deal.