Will the Netflix, Warner Bros Deal Get Approved?

Core Viewpoint - The potential merger between two major streaming companies is expected to face significant scrutiny from regulatory bodies in the U.S., Europe, and the U.K. due to concerns over horizontal and vertical overlaps in the market [1][2]. Regulatory Concerns - The merger raises horizontal concerns as both companies provide streaming services, and vertical concerns as a large streaming service is acquiring a major movie and TV producer along with a substantial content library [2]. - There are monopsony concerns, indicating that the merger could lead to fewer buyers in the market, negatively impacting artists, production staff, and writers involved in content creation [3]. Investigation Process - An in-depth investigation typically begins with the issuance of second requests for information, which are extensive subpoenas for business documents and data from the companies involved [5]. - After reviewing the material, the Department of Justice (DOJ) can either clear the merger, negotiate a settlement, or pursue legal action to block the deal [5][6]. Potential Outcomes - A negotiated settlement may involve divesting certain products or agreeing to behavioral remedies regarding the post-merger company's market behavior [6]. - If no agreement can be reached, the DOJ may seek a permanent injunction to prevent the merger from proceeding, similar to past cases like AT&T's attempt to acquire Time Warner [6]. Political Influence - The current political climate may affect the merger's outcome, with the administration showing mixed signals regarding consolidation across industries [8][9]. - The administration's stance could lead to a higher risk of the merger facing legal challenges if it is perceived negatively by the president [9]. Lobbying and Backroom Deals - There are indications that companies involved in the merger may be engaging lobbyists aligned with the current administration to facilitate the deal, although the specifics of these negotiations remain unclear [10][11]. - The administration's dissatisfaction with the current buyer, preferring a different company, adds another layer of complexity to the merger's approval process [12].