Democratic Sen. Elizabeth Warren and Rep. Becca Balint have penned a letter to the Department of Justice’s Associate Attorney General Stanley Woodward urging the agency’s antitrust division to “closely scrutinize” Fox’s pending $22 billion acquisition of Roku.
If approved, the merger would combine two of the country’s largest free, ad-supported streaming services — Tubi and The Roku Channel. The pair warns that the combined company would have greater control over how viewers watch TV, the device they use to watch and what programs they watch, resulting in “fewer choices for viewers and likely higher costs.”
“We are concerned that, given the Department of Justice’s recent rubber-stamping of deals that may violate antitrust law – and in particular, your apparent role interfering in nonpartisan antitrust enforcement — the [DOJ] may not give this transaction the close review it deserves,” the lawmakers’ letter states. “In order to uphold the Antitrust Division’s responsibility to protect competition and consumers, we urge DOJ to closely scrutinize the proposed Fox-Roku deal under antitrust law and seek your commitment that the review will be conducted free from political interference and in an impartial fashion.”
Fox to Buy Roku in $22 Billion Deal
The letter stated that a combined Fox-Roku would have “significantly more integrated information about viewer habits,” which could help it determine how much a viewer might be willing to pay for Fox-Roku products and raise prices to
that limit, as well as help give it an unfair advantage over competitors.
A combination could also give them the incentive to “preference and steer” Roku’s 100 million streaming households towards Fox’s own news, sports and entertainment content, disadvantaging competitors and limiting consumer choice, the lawmakers said.
In addition, they warned that the combination of the country’s two top FAST services would “reduce consumer choice for free streaming services and could give the combined entity market power to start charging for a previously free service.” They added that the combined entity could also choose to revert its original business model and produce less original programming overall.
The letter goes on to note that the entertainment and streaming industries are “consolidating at an alarming rate,” pointing to Disney’s acquisition of a majority stake in Fubo and the Paramount-Skydance and Paramount-Warner Bros. Discovery mergers.
“We are encouraged by reports that state attorneys general are preparing to block the Paramount-Warner Bros. merger,” the pair wrote. “The trend toward
consolidation in the entertainment and streaming industries over the past several years, however, is unmistakable and underscores the need for careful review of the proposed Fox-Roku merger.”
They also raised concerns about Woodward’s impartiality, pointing to reports that the DOJ closed its investigation and cleared the Paramount-WBD merger despite some staff attorneys leading towards a legal challenge.
The letter seeks responses to eight questions by July 30, including the DOJ’s dealings with the White House and non-DOJ lawyers, lobbyists or consultants on any matters related to antitrust enforcement, the status of the Fox-Roku merger review and whether any of the agency’s enforcers were told not to bring federal antitrust cases to court.
“When DOJ makes decisions based on political favoritism rather than the facts and the law, costs go up for American families. Congress enacted federal antitrust laws to push back against consolidation that was threatening economic liberty and driving up costs,” the letter concludes. “Unbiased enforcement of these laws is necessary to promote competition and economic security for working families. If DOJ surrenders its enforcement authority to giant corporations looking to
amass more power, costs will rise and families will suffer.”
In addition to Warren and Balint, the letter is signed by Democratic lawmakers Jerry Nadler, Maxwell Frost, Chuy Garcia, Pramila Jayapal, Summer Lee and Pat Ryan.
