The US Justice Department's investigation of Netflix Inc's proposed $72-billion takeover of Warner Bros Discovery Inc includes scrutiny of the streaming giant’s behaviour and whether it wields anticompetitive leverage over creators in negotiations for acquiring programming, a Bloomberg report said.
The department is seeking to determine whether the deal "may substantially lessen competition or tend to create a monopoly in violation of Section 7 of the Clayton Act or Section 2 of the Sherman Act", according to a copy of a civil investigative demand sent to an independent movie studio, which Bloomberg News has reviewed.
The language in the demand, an administrative subpoena that hasn’t been previously reported, is the clearest sign yet that the Trump administration is going beyond a standard deal review as it investigates the merger, refuting an argument by Netflix in recent weeks that the government is not engaged in anything beyond the typical process, the report said.
The broad scope of the review is also a strong indication that it will take many more months before the government decides whether to challenge the Netflix-Warner Bros deal in court. This delay may benefit rival bidder Paramount Skydance Corp.
“Netflix operates in an extremely competitive market. Any claim that it is a monopolist, or seeking to monopolise, is unfounded,” Netflix chief legal officer David Hyman said in a statement.
