Senator Chuck Grassley, chairman of the Senate Judiciary Committee, has called for careful scrutiny of the proposed merger between Netflix and Warner Brothers. The committee held a hearing on Tuesday to examine how the transaction could affect competition in the streaming industry.
Grassley noted that while watching television and films remains an important part of American culture, viewing habits have changed quickly with the rise of subscription streaming platforms. The proposed deal would bring together Netflix, a major streaming service, with Warner Brothers’ studio assets and HBO Max.
“This proposed merger could affect prices and choices,” Grassley said. “Congress enacted the antitrust laws to protect competition and consumers.”
He explained that both the Department of Justice and Federal Trade Commission are responsible for applying antitrust laws in an impartial way, while Congress provides oversight. “Opponents warn this deal could reduce head-to-head competition in subscription streaming, and lead to higher prices or less innovation,” he added.
Grassley also mentioned concerns raised by theater owners about possible shorter release windows and fewer wide theatrical releases. He pointed out that control over a large platform along with an extensive film library can impact bargaining power across the industry and limit consumer options.
“Control of both a large platform and a deep library of films and shows can affect the bargaining power across the industry. So, I say, regulators ought to examine those dynamics carefully,” Grassley stated.
The companies involved argue that merging will improve quality, expand distribution, and allow greater investment in content. However, Grassley insisted these claims should be evaluated closely: “Any claimed benefits must result from the merger itself, be verifiable and likely make content available to more families.”
He also cautioned against using merger reviews as a way to delay business decisions: “Further, and importantly, merger review shouldn’t be used as a strategy to keep a company from moving forward for years by limiting its ability to pursue lawful alternatives while market conditions continue to change.”
The Senate Judiciary Committee plays a significant role in overseeing federal law enforcement agencies and evaluating legislation related to constitutional protections, civil rights, public safety, judicial nominations, as well as broader legal matters. The committee is led by its chairperson who organizes hearings such as this one examining mergers that may impact national markets (official website).
“I encourage our antitrust regulators to carefully scrutinize this transaction to ensure that competition is not undermined and to make sure that consumers are protected,” Grassley concluded.
The hearing included testimony from witnesses on both sides of the issue.
