The U.S. Federal Trade Commission is launching a probe into Amazon’s nearly $US8.5 ($11) billion bid to acquire MGM Studios, the Information reported Friday.
The FTC, newly led by vocal Amazon critic Lina Khan, will focus its investigation on “the larger implications of the deal for Amazon’s market power,” two people familiar with the matter told the outlet. According to these sources, the agency is concerned that this merger 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.”
In May, Amazon announced that it had reached a deal to purchase MGM and, along with it, the rights to the legacy film studio’s movie and TV library. At nearly $US8.45 ($11) billion, it’s one of Amazon’s largest acquisitions to date, second only to its $US13.7 ($18) billion purchase of Whole Foods in 2017.
Of course, given Amazon’s track record of antitrust lawsuits and complaints, federal scrutiny seemed inevitable. The Wall Street Journal confirmed these rumours on June 22nd, reporting that an FTC investigation into the merger was in the works. Not long after, Senator Elizabeth Warren of Massachusetts called on the FTC to thoroughly review the potential “anticompetitive effects” this deal could have on both the entertainment industry and Amazon’s existing stranglehold on other markets, she wrote in a letter to Khan reviewed by the Verge.
This investigation would be the latest push at the federal level to break up some of America’s largest companies. Earlier on Friday, President Joe Biden signed a wide-ranging executive order aimed at promoting competition in the U.S. economy — particularly in Silicon Valley.
It urges the FCC to re-evaluate net neutrality standards for broadband companies and roll back anti-competitive restrictions that force consumers to rely on manufacturers to repair their gadgets. The campaign to bust up Big Tech has also secured bipartisan support in Congress, which recently introduced new antitrust legislation intended to limit their power and increase market competition.