Senator Warren Urges FTC to Examine Amazon’s MGM Acquisition
Senator Elizabeth Warren is urging the Federal Trade Commission to launch a detailed review of Amazon Inc (NASDAQ:AMZN)’s offer to buy MGM, as the purchase could have the tinges of unfair competition within the juicy streaming business.
Amazon move on MGM, seen as unfair competition
According to The Verge, Warren sent a letter to recently-appointed FTC chair Lina Khan, urging the entity to scrutinize, “the possible anticompetitive effects this deal will have on streaming services and entertainment products.”
In her letter, Warren also underlines the “broader impacts that this transaction may have on workers, small businesses, and competition overall as Amazon —which already dominates numerous markets— accelerates its aggressive monopolistic behavior.”
Last May, Amazon announced an $8.45 billion deal to acquire the legacy film studio, with Mike Hopkins, svp of Prime Video and Amazon Studios stating: “Amazon was drawn to MGM because of the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team.”
Sources agree that the FTC will review the deal as part of the larger antitrust investigation of Amazon’s business and those of the other Big Five tech companies including Google –– Alphabet Inc Class A (NASDAQ:GOOGL)–– Facebook Inc (NASDAQ:FB), Apple Inc (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT).
FTC to determine if acquisition is an entertainment strategy
Warren argues that Amazon’s supersized wallet will give it a prime advantage to outmuscle any competitor in its quest to conquer the streaming realm. With the move, Amazon will get hold of around 4,000 films and 17,000 hours of TV.
Although Amazon’s presence in the film industry is limited, the move is seen as containing several advantages when the company enters the streaming market.
In her letter, Warren pointed to Section 7 of the Clayton Antitrust Act as excluding mergers for which the outcome “may be substantially to lessen competition, or to tend to create a monopoly.”
In her letter, however, Warren wrote that the company’s “tactic to operate at a financial loss and use low prices to lure in customers and capture the market has worked before, and the FTC must determine whether this vertical acquisition is truly an entertainment strategy or merely another step towards unfettered monopolization.”
Amazon, Google, and Facebook are part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families.
The post Senator Warren Urges FTC to Examine Amazon’s MGM Acquisition appeared first on ValueWalk.
Source valuewalk