"The department is seeking to determine whether the deal "may substantially lessen competition or tend to create a monopoly in violation of Section 7 of the Clayton Act or Section 2 of the Sherman Act," according to a copy of a civil investigative demand reviewed by Bloomberg News that was sent Friday. It went to an independent movie studio, according to people familiar with the matter."
""Netflix operates in an extremely competitive market. Any claim that it is a monopolist, or seeking to monopolize, is unfounded," Netflix Chief Legal Officer David Hyman said in a statement. "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.""
"The application of both laws has precedent, and the investigation may not result in any federal action. But deal reviews are typically conducted by US antitrust enforcers using just the Clayton Act, which is specifically for merger investigations. The Sherman Act is a statute more typically used to target illegal monopolization by a single company such as Alphabet"
The Justice Department has issued a civil investigative demand probing whether Netflix's proposed $72 billion acquisition of Warner Bros. Discovery could substantially lessen competition or create a monopoly under Section 7 of the Clayton Act or Section 2 of the Sherman Act. The subpoena was sent to an independent movie studio, signaling a review broader than a routine merger investigation and suggesting the probe may take many more months. The delay could benefit rival bidder Paramount Skydance. Netflix denied monopoly power and pledged cooperation. Officials note precedent for applying both statutes, though Sherman Act use in merger reviews is less typical.
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