Netflix bid for Warner Bros draws antitrust warnings from GOP lawmakers

Lee leads the Senate Judiciary Subcommittee on Antitrust, which would oversee any congressional review.

U.S. Rep. Darrell Issa, R-Calif., a senior member of the House Judiciary Committee, and Sen. Roger Marshall, R-Kan., have also raised early concerns. They say federal regulators should closely examine any deal that could further concentrate power in the streaming and entertainment markets.

“With more than 300 million global subscribers and a vast content library, Netflix currently wields unequaled market power,” Issa wrote in a statement. “Adding both HBO Max’s subscribers and Warner Bros.’ premier content rights would further enhance this position, reportedly pushing the combined entity above a 30 percent share of the streaming market: a threshold traditionally viewed as presumptively problematic under antitrust law.”

Netflix has reportedly hired antitrust attorney Steven Sunshine of Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates to guide its bid. 

Sunshine has advised on several high-profile mergers over the past decade that faced federal challenges. In multiple cases where he represented the acquiring company, the deals were blocked or later abandoned after intervention from the Department of Justice or the Federal Trade Commission. Those included Visa’s attempted purchase of Plaid, Adobe’s effort to buy Figma, and Sabre’s proposed acquisition of Farelogix.

If Warner Bros Discovery accepts the Netflix offer, the DOJ antitrust division will likely conduct an expansive review, The New York Post reports. The report says DOJ officials are preparing for a “sweeping, multiyear investigation” into the competitive effects of the transaction.

The sale process itself has also drawn criticism.

Paramount Global, which is competing with Netflix for the same Warner Bros assets, sent a letter to Warner Bros Discovery this week questioning whether all bidders are receiving fair treatment. 

“It has become increasingly clear, through media reporting and otherwise, that WBD appears to have abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders, and embarked on a myopic process with a predetermined outcome that favors a single bidder,” the letter from attorneys at Quinn Emanuel says. “We specifically request and expect this letter will be shared and discussed with the full board of directors of WBD.”

Netflix’s bid would give the company control of one of the largest film and television libraries in the world, along with its massive streaming infrastructure. Lawmakers say those assets would significantly expand Netflix’s reach and raise new questions about market power in a sector already dominated by a powerful few.

Federal regulators have not publicly confirmed any action. However, the early reaction from Republican lawmakers indicates the deal would not move forward without intense scrutiny.