A coalition of Republican attorneys general from 11 states is asking the Justice Department to conduct a “thorough and exacting” antitrust review of the pending merger between Netflix and Warner Bros. Discovery, a deal facing intensifying legal and political pressure.
In a letter submitted Tuesday, the state officials say they share concerns made by private plaintiffs in consumer class-action lawsuits opposing the entertainment merger on anticompetitive grounds.
A complaint filed last week argues Netflix would further consolidate its grip on the streaming industry by acquiring HBO Max, leading to higher subscription prices and reduced competition.
“If Netflix is permitted to consummate its acquisition of Warner Brothers (sic), the elimination of competitors and the vertical foreclosure of content library inputs that are crucial to competitors may lead to, among other things, a monopoly that will charge the State’s citizens higher subscription prices for less content of reduced quality,” the new letter states.
The undersigned attorneys general also argued that the deal would negatively impact the theatrical industry, which has struggled to rebound from the COVID-19 pandemic and Hollywood strikes years prior.
“We respectfully urge you to conduct a thorough review of the proposed merger,” the letter concludes. “We also offer any assistance that you may need as you consider the deal.”
The Clayton Antitrust Act of 1914 was cited as the foundational law on which the requested investigation should be based.
The DOJ is scrutinizing Netflix for potential monopolization risks beyond the expected antitrust review. Netflix co-CEO Ted Sarandos has repeatedly denied that the streaming service’s stand-alone business is under a monopolization investigation, but recent reporting suggests otherwise.
The letter came on the same day that Warner Bros. announced it would seriously consider Paramount Skydance’s increased bid, although the for-sale studio’s agreement with Netflix still stands. If Warner Bros. accepts the revised offer, Netflix will get four business days to match Paramount. A Warner Bros. shareholder vote on the Netflix agreement is scheduled for March 20.
Nebraska Attorney General Mike Hilgers and Montana Attorney General Austin Knudsen led the request. They were joined by the attorneys general from Alabama, Alaska, Iowa, Kansas, North Dakota, South Carolina, Tennessee, Utah, and West Virginia.
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The letter was addressed to Attorney General Pam Bondi, Deputy Attorney General Todd Blanche, and Antitrust Division acting Assistant Attorney General Omeed Assefi.
Assefi took over the role from Gail Slater, who resigned earlier this month. She did not provide a reason for her unexpected departure. The former antitrust chief was leading the investigation into the merger.