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FTC Steps In To Review Amazon’s MGM Acquisition

FTC Steps In To Review Amazon’s MGM Acquisition

June 22, 2021 at 10:31PM
by PYMNTS

The U.S. Federal Trade Commission (FTC) is stepping in to take a look at Amazon’s proposed acquisition of MGM, The Wall Street Journal (WSJ) reported Tuesday (June 22).

Amazon’s tie-up with MGM would help the eCommerce giant expand its Prime Video streaming unit to better compete against Netflix and Disney, according to WSJ. MGM’s robust library of films and television tops 4,000, including the “James Bond” chronicles and “The Handmaid’s Tale.”

The FTC and the U.S. Department of Justice (DOJ) share the task of looking into big mergers. FTC had lobbied for jurisdiction and now has the right to review the details, WSJ reported, citing unnamed sources. The FTC had also presented a case to oversee the merger due to its current anti-competition case with Amazon and how the eCommerce giant conducts business.

Previously, the FTC and the DOJ came to an agreement previously to divide Big Tech probes into how tech behemoths handled business, WSJ reported. The DOJ looks into Google and Apple while the FTC handles Facebook and Amazon.

Amazon has expanded its production of streaming content — including buying NFL rights and the rights to stream other sports — but its inventory is small in comparison to the holdings of other media firms, according to WSJ. MGM is among the smaller Hollywood studios, and the Amazon merger isn’t a guarantee, but it is one that might have previously flown under the radar regarding antitrust concerns.

Amazon’s strong footprint in the digital marketplace is thought to be the possible reason the merger with 100-year-old film studio MGM is getting attention from authorities, WSJ reported.

The proposed $8.5 billion purchase of MGM by Amazon could preserve MGM’s heritage and make its films and television shows available for wider viewing, PYMNTS reported in May.

“Through this acquisition, Amazon [will] empower MGM to continue to do what they do best: great storytelling,” the companies said in a joint statement at the time.