Feds Open Investigation Into Amazon’s Acquisition of MGM
As many have anticipated, the Federal Trade Commission has opened an investigation that will probe Amazon's recent $8.45 billion acquisition of MGM.
According to The Information, the investigation will be “in-depth” and under the direction of Lina Khan’s FTC. Khan is an antitrust advocate and, needless to say, an outspoken critic of Amazon. All signs point to the investigation unfolding over a series of months.
As per The Information, the probe will hone in on “the larger implications of the deal for Amazon’s market power.”
“The FTC is wary of whether the deal will illegally boost Amazon’s ability to offer a wide array of goods and services, and is not just limited to content production and distribution.”
The deal raised eyebrows almost immediately, as awareness of the sheer size of these growing media conglomerates becomes more fully understood and frequently criticized both publicly and, amazingly, on both sides of the political aisle.
“This is a major acquisition that has the potential to impact millions of consumers,” said Senator Amy Klobuchar (D-MN), who chairs the Senate Antitrust Subcommittee. “The Department of Justice must conduct a thorough investigation to ensure that this deal won’t risk harming competition.”
Klobuchar has also used the merger to highlight the importance of funding for the DOJ and the Federal Trade Commission to conduct thorough reviews into such huge transactions.
“Our government cannot ensure major corporations are playing by the rules if enforcement agencies are chronically underfunded,” she said.
Republicans, already at odds with Amazon due, in part, to a public feud between Amazon founder Jeff Bezos and former President Donald Trump, have also made their feelings known.
“This sale should not go through. Amazon is already a monopoly platform that owns e-commerce, shipping, groceries & the cloud. They shouldn’t be permitted to buy anything else. Period,” tweeted Sen. Josh Hawley (R-MO).
It’s not just those in politics who are critical of Amazon’s trajectory with regard to power and marketplace acquisition.
Media mogul and former CEO of Paramount and 20th Century Fox Barry Diller reflected briefly on the company's perceived intentions in a recent interview with NPR regarding the effect that streaming content has had on the industry as a whole.
“The system is not necessarily to please anybody,” said Diller, implying that Amazon’s acquisition of the studio is merely a means to bolster its e-commerce influence. “It is to buy more Amazon stuff.”
The FTC’s peek behind the curtain is indicative of the Biden administration’s general tidying up of antitrust regulations, net neutrality, and right to repair rules.
For its part, Amazon has already filed a recusal motion requesting that Lina Khan take a hands-off approach to any proceedings involving the company, surely due to her years of scrutiny with regard to the company, including a 2017 essay titled “Amazon’s Antitrust Paradox” published in the Yale Law Journal.
Amazon’s acquisition of MGM follows Discovery’s merger with WarnerMedia in May, which resulted in similar calls for the Biden Administration to ensure oversight and worker protection.