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Sen. Elizabeth Warren sent a letter to Federal Trade Commission chair Lina Khan late Tuesday, asking the regulator to conduct a “broad and meticulous” review of Amazon’s proposed acquisition of MGM Studios. Meanwhile on Wednesday, Amazon demanded that Khan recuse herself from any matters relating to the company.
The FTC has been tasked with reviewing the $8.45 billion deal and will decide whether to approve it, fight it in court, or ask for other remedies.
“Amazon is a large and powerful acquirer with expansive operations; an investigation into the ramifications of this deal should include both its direct impacts on streaming services and prices charged to consumers and its broader effects on small businesses, workers, and the economy as a whole,” Warren wrote in the letter. “This $8.45 billion deal would ostensibly help Amazon attract consumers to its subscription streaming services. But because this service is tied to a wide range of additional Amazon products and services that affect broad sectors of our economy, this transaction requires meticulous antitrust scrutiny.”
Specifically, Warren cited concerns that the acquisition could have in the video streaming market. Amazon has said that it is buying MGM because of its vast library of intellectual property rights, including the James Bond franchise, the Rocky/Creed franchise, and The Silence of the Lambs. Presumably, original shows and movies would become exclusive to Amazon Prime Video.
“A typical antitrust analysis of a vertical deal would assess whether the acquisition could grant Amazon the incentive and ability to disadvantage Prime Video’s streaming service competitors or MGM’s production-company competitors,” Warren wrote. “While the FTC should investigate the possible anticompetitive effects under this framework, I urge the FTC to also consider how Amazon and its expansive operations may already have the ability to harm competition in these markets, even without acquiring MGM, and how the MGM acquisition may exacerbate this concern.”
“For example, Netflix is a customer of Amazon that uses Amazon Web Services (AWS), which is a dominant vendor of cloud infrastructure,” Warren added. “As a result, Amazon already possesses a trove of sensitive information from Netflix and thousands of other companies that use AWS. Whenever Amazon enters a new market, Amazon could exploit these data to its advantage, thwarting competition in the process.”
Warren went on to describe some of her other concerns with Amazon, such as its impact on small businesses and its treatment of workers.
While it isn’t unusual for Senators to send letters to regulatory bodies like the FTC or FCC urging investigations or reviews, Amazon is facing particularly high scrutiny, with Khan’s FTC already conducting a review of the company’s business practices. It would also be an opportunity for Khan, who made a name for herself in law school after writing an article in the Yale Law Journal called “Amazon’s Antitrust Paradox,” to set a tone for her regulatory approach.
On Wednesday, Amazon demanded that Khan recuse herself from any matters relating to the company. Khan “has on numerous occasions has argued that Amazon is guilty of antitrust violations and should be broken up,” the company wrote in a filing with the FTC, according to Bloomberg. “These statements convey to any reasonable observer the clear impression that she has already made up her mind about many material facts relevant to Amazon’s antitrust culpability.”
Updated 8:50 AM with Amazon’s recusal demand.
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