FTC Gears Up For Potential Challenge To Amazon’s $8.5B MGM Takeover

The US Federal Trade Commission (FTC) is gearing up for a potential antitrust lawsuit challenging Amazon’s $8.5 billion takeover of MGM Studios, the Information reported on Monday.

Amazon’s interest in the movie studio coincides with the rise of streaming platforms and services that have grown to become one of the largest sources of entertainment and audiovisual content for US and European audiences.

Amazon’s own streaming service, Amazon Prime Video, has quickly positioned itself as a significant competitor to streaming giant Netflix, alongside traditional film and television studios that have joined the streaming bandwagon, including Disney, Warner Media’s
HBO, or Paramount studios.

The FTC is exploring actions, including hiring expert witnesses to appear in an eventual trial. The FTC will decide whether to bring the case in the next few weeks.

The move would be the latest in the ongoing FTC review of Amazon’s planned purchase of the US movie studio, home to the “James Bond” franchise. The deal was announced in May last year, swiftly followed by the FTC’s warnings of a potential investigation.

The deal’s high visibility has been seen by some commentators as a reason for the FTC’s interest in the deal, sending a clear signal to the Silicon Valley tech giant that it can expect all major deals to be met with some level of regulatory pushback.

In June, Amazon had filed a petition asking for FTC Chair Lina Khan, who has been a vocal Amazon critic, to be recused on antitrust matters related to the online retail giant because of her previous work while at an antitrust advocacy group, public statements and work for a congressional subcommittee.

The market for streaming content has grown rapidly in recent years, boosted by the COVID-19 pandemic’s various lockdowns and restrictions that limited entertainment options for much of the world’s population. Once dominated by the likes of Netflix, multiple platforms now compete in the market.

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