Execs from Netflix and Warner Bros. Discovery were in the hot seat yesterday, defending the proposed merger of the two companies in front of a U.S. Senate antitrust committee.
Driving the news: The thrust of Netflix’s argument for why the deal isn’t anti-competitive is that the purview of antitrust regulators is too limited. Netflix isn’t just competing with other streamers, you see, it’s competing with anything that catches a viewers’ attention, including social media.
In particular, Netflix played up YouTube’s market dominance. Though it’s not a traditional streamer, it accounts for more U.S. TV viewing time than anyone else.
Zoom out: Netflix faces other challenges. A group called the Oversight Project has passed a report around the halls of power accusing Netflix of being a purveyor of left-wing propaganda looking to “build the biggest political and ideology messaging machine in human history.”
Why it matters: The fate of the deal, in the U.S. at least, will come down to the Department of Justice. However, the Senate and Trump — who said he will “be involved” in the review and claimed to be worried about a potential monopoly — will both be able to exert great influence.
Our take: If the Netflix-WB merger goes through, some unsavoury stuff will have likely happened. First, regulators accepted Netflix’s argument, which could have catastrophic consequences for future antitrust suits. Second, Netflix will likely have to kowtow to Trump in some capacity, another indicator of a new era of crony capitalism. Neither of these are great developments.—QH