The U.S. Department of Justice is examining whether Netflix’s potential $82.7 billion purchase of Warner Bros. could result in a streaming market monopoly. The agency is scrutinizing the company’s business practices and the prospective deal’s competitive effects.
According to court documents reviewed by The Wall Street Journal, the U.S. DOJ has launched a comprehensive investigation into the operational conduct of the online entertainment service Netflix.
The agency is weighing whether the acquisition of Warner Bros. by Netflix, as planned, might foster monopolistic conditions.
The DOJ reportedly asked an undisclosed, rival entertainment company, “Specify any other exceptional actions Netflix might have taken that could contribute to enhancing market or monopolistic power.” The firm’s identity was not revealed in the WSJ article.
Furthermore, the department expressed interest in how prior mergers of studios or distributors have impacted the competition for creative talent, requesting details on how talent contracts vary across different studios. These reviews could extend up to a year. The newspaper emphasizes that antitrust authorities possess the authority to file suits to halt any transaction that significantly diminishes competition.
Nevertheless, Netflix legal counsel, Steven Sunshine, characterized the ministry’s probe as a routine review. “We have received no formal notification, nor have we observed any other indications that the Department of Justice is conducting a separate monopolization inquiry,” he stated.
In December, it was announced that Netflix would acquire the film studio Warner Bros., the HBO Max streaming service, and the HBO channel from Warner Bros. Discovery for a total of $82.7 billion. The companies had already confirmed the agreement.
DOJ guidelines classify mergers between companies holding a combined market share exceeding 30% as potentially unlawful; monopolies typically represent a market capture of 60% or more. The paper notes that, combined, Netflix and HBO Max would command approximately 30% of the U.S. subscription streaming market.
Netflix, however, maintains that its actual competition is not Warner Bros., but rather video platforms such as YouTube, and thus the transaction should be viewed as a vertical integration between a content producer and a distributor.
Previously, the news of the Warner Bros. acquisition elicited mixed reactions in Hollywood, where warnings were issued regarding risks to the industry, leading to calls for regulators to block the agreement. Additionally, remarks from U.S. President Donald Trump highlighted that Netflix already holds a substantial market share that would markedly increase following the takeover.
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