The U.S. Department of Justice has opened an antitrust query into Netflix’s proposed acquisition of Warner Bros. Discovery, a routine but significant step that involves issuing civil investigative demands to filmmakers and producers as the rival bids for the media company near a critical decision point.
The DOJ’s Antitrust Division is seeking documents and sworn responses related to Netflix’s $83 billion offer for Warner Bros. Discovery’s studio and streaming assets, according to copies of the demand reviewed by multiple people familiar with the matter. Recipients have until March 23 to reply.
In the demand, the Justice Department said it is investigating whether the proposed transaction would substantially lessen competition or create a monopoly, citing potential violations of federal statutes including Section 7 of the Clayton Act and Section 2 of the Sherman Act.
The probe comes as Warner Bros. Discovery’s board approaches the end of a weeklong review of competing bids from Netflix and Paramount, which is pursuing its own acquisition proposal through a David Ellison-controlled entity. Warner Bros. Discovery shareholders are scheduled to vote March 20 on a board recommendation to proceed with Netflix’s offer.
The DOJ inquiry is expected to add months to the regulatory timeline for any transaction involving Warner Bros. Discovery, regardless of which bidder prevails. Netflix said it is prepared to cooperate with regulators and rejected suggestions that the deal would create monopoly power.
The antitrust probe began several weeks ago, according to people familiar with the matter, and intensified in recent days with the civil investigative demands. The outcome of the DOJ investigation could determine whether any acquisition of Warner Bros. Discovery moves forward this year or faces prolonged regulatory review.
“We have not been given any notice or seen any other sign that the DOJ is conducting a monopolization investigation,” Steve Sunshine, head of Skadden’s Global Antitrust/Competition Group and a lawyer for Netflix, said.
Issuing CIDs to third parties is a routine part of federal merger guidelines issued in 2023. The existence of DOJ reviews, largely fact-gathering processes, does not necessarily reflect any determination about the merits of the transaction or Netflix’s business practices.
David Hyman, Netflix’s Chief Legal Officer, told TheWrap: “Netflix operates in an extremely competitive market. Any claim that it is a monopolist, or seeking to monopolize, is unfounded. Our success stems from innovation and investment that benefit consumers. We neither hold monopoly power nor engage in exclusionary conduct, and we’ll gladly cooperate, as we always do, with regulators on any concerns they may have.”
Representatives for the Justice Department, Warner Bros. Discovery and Paramount did not immediately respond to requests for comment Sunday.
Lucas Manfredi contributed reporting to this story.
