In a letter sent to Federal Trade Commission (FTC) Chair Lina Khan, Sen. Elizabeth Warren asserted that Amazon’s billion-dollar bid for MGM might harm consumers and extend Amazon’s market dominance beyond an acceptable level.
The letter, first published in The Verge, outlined the senator’s concerns about the online retail giant’s power in streaming and entertainment services with Prime Video in addition to its market dominance in other online areas and overall competitive voraciousness.
“Amazon’s massive presence in a host of retailing businesses creates conflicts of interest throughout its online marketplace ecosystem that may provide it with the incentive and ability to harm competitors in unexpected ways that a narrowly-focused antitrust analysis may not anticipate or reveal,” Warren wrote in the letter dated June 29.
“Therefore, the FTC should look beyond streaming and entertainment services and assess the possible competitive effects on customers, sellers, and workers across all of Amazon’s retailing segments when reviewing this transaction.”
Amazon has a limited footprint in the film industry, but it will have a number of advantages as it enters the market.
The company’s deep pockets put the company in a virtually unmatched position to invest heavily to strengthen its position in the streaming wars. Moreover, Prime Video is offered as one of many services that are technically “perks” rather than individual paid subscriptions. New offerings like exclusive content serve to boost the appeal of Amazon’s paid Prime subscription service, which costs US$119 per year.
Amazon announced in May that it had reached a deal to acquire the legacy film studio for US$8.45 billion. At the time, SVP of Prime Video and Amazon Studios Mike Hopkins said that Amazon was drawn to MGM because of “the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team.”
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