Amazon-MGM deal slammed by tech foes on likely path to approval

Amazon is the second-largest paid streaming service in the world behind Netflix Inc., and the MGM acquisition will give it more than 4,000 movies and 17,000 TV shows, including “Rocky,” “RoboCop” and “The Handmaid’s Tale.”

But the combination still leaves many studios competing to produce content. MGM doesn’t even rank among the top five Hollywood studios by box office share: Walt Disney Co., Warner Bros., Universal Pictures, Sony Group Corp. and Lions Gate Entertainment Corp. Then there’s Netflix, which produces its own content for its streaming service, including hits like “Bridgerton,” “Stranger Things” and “The Queen’s Gambit.”

That’s not stopping criticism of the takeover.

“In acquiring MGM Studios, Amazon is brazenly trying to take over another sector of the economy,” said Sarah Miller, the executive director of the American Economic Liberties Project, an anti-monopoly organization in Washington. “Congress should respond quickly by passing bipartisan legislation to ban mergers by large tech firms.”

On Capitol Hill, Republican Senator Josh Hawley of Missouri, a fierce critic of tech platforms, said on Twitter that Amazon is a monopoly that “shouldn’t be able to buy anything else. Period.”

“This is a major acquisition that has the potential to impact millions of consumers,” said Senator Amy Klobuchar of Minnesota, who chairs the Senate’s antitrust panel. “The Department of Justice must conduct a thorough investigation to ensure that this deal won’t risk harming competition.”

Amazon and its tech peers have bought hundreds of companies in the last decade, none of which has been stopped by antitrust enforcers. Their buying spree has triggered criticism that antitrust cops aren’t being aggressive enough to challenge the companies. It’s also fueling calls for new legislation that would revise antitrust laws.

The $8.45 billion MGM deal is Amazon’s second-largest acquisition after Whole Foods Market Inc., the grocery chain Amazon bought for about $13.7 billion in 2017. That deal was cleared by antitrust officials at the FTC without an in-depth investigation.

With the Whole Foods deal, Amazon was making a major acquisition in a market where it wasn’t a big player, so it didn’t raise competition concerns. The MGM acquisition fits the same pattern, said Jennifer Rie, an analyst at Bloomberg Intelligence, who expects the deal will clear the antitrust review. That will probably help build support for antitrust legislation that will give enforcers new tools to stop deals, she said.

The biggest critics of the tech companies “simply don’t think these companies should be able to get any bigger,” Rie said. “That’s not where the law stands now.”

—Bloomberg News

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