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The Federal Trade Commission will review Amazon.com Inc.’s proposed $8.45 billion purchase of MGM studios under the regulator’s new chair, an especially vocal critic of the online giant’s expansion.
The MGM deal, which would greatly expand content on the Amazon Prime Video streaming platform with the James Bond franchise and TV fare like “The Handmaid’s Tale,” will fall under the purview of the FTC and its new chair, Lina Khan, according to a Wall Street Journal report Tuesday.
Amazon
AMZN,
shares were up nearly 1.5% in early-afternoon trading Tuesday. An Amazon spokesman declined comment and the FTC was not immediately available for comment.
Privately, those familiar with Amazon’s strategy insist MGM will provide more choice of quality entertainment options for viewers. They also point out that MGM is one of Hollywood’s smallest established studios with only 1% of box office gross in North America last year, lagging badly behind Sony Pictures, Universal, Warner Brothers, Walt Disney/20th Century Fox/20th Century Studios, and Paramount Pictures.
Recently, the Department of Justice has reviewed video-content acquisitions, including Walt Disney Co.’s
DIS,
transaction of 21st Century Fox, and AT&T Inc.’s
T,
purchase of Time Warner. But as Amazon ratchets up streaming content in competition with Disney, AT&T, Apple Inc.
AAPL,
Comcast Corp.
CMCSA,
and others, the FTC took the lead. The five-member commission already has a wide-ranging antitrust investigation into Amazon’s business practices.
As a Yale Law School student, Khan wrote a 2017 article in the Yale Law Journal that Amazon shouldn’t be excluded from antitrust scrutiny simply because it had a history of cutting prices.
