Warren Calls For a Broad and Meticulous FTC Review of Amazon's Acquisition of MGM Studios
Recent deal could harm consumers and workers, and reduce innovation by inhibiting competition in numerous markets
Washington, DC - United States Senator Elizabeth Warren (D-Mass.) sent a letter to Federal Trade Commission (FTC) Chair Lina Khan calling for a "broad" and "meticulous" review of Amazon's acquisition of Metro-Goldwyn-Mayer Studios (MGM) consistent with Section 7 of the Clayton Act, legislation that prohibits any acquisition whose effect "may be substantially to lessen competition, or to tend to create a monopoly" in "any line of commerce or in any activity affecting commerce." Without thorough review, the deal has potential to harm consumers and workers, and reduce innovation by inhibiting competition in numerous markets.
"I urge you to use the FTC's broad authority under this law to assess the possible anticompetitive effects this deal will have on streaming services and entertainment products in addition to the broader impacts that this transaction may have on workers, small businesses, and competition overall as Amazon-which already dominates numerous markets-accelerates its aggressive monopolistic behavior," Senator Warren wrote.
Senator Warren calls into question the FTC's typical approach when reviewing vertical transactions: a narrow assessment primarily focusing on price effects in the relevant product or service markets. However, because this deal will affect Amazon Prime, a service tied to a wide range of additional Amazon products and services that affect broad sectors of our economy, this transaction requires meticulous antitrust scrutiny. Senator Warren also raised concerns about the transaction's broader effects on customers, sellers, and workers across all of Amazon's retailing segments.
"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," Senator Warren wrote. "Dutifully scrutinizing this transaction is necessary to protect workers, small businesses, competition, and innovation."
Senator Warren has been a vocal leader in the movement to rein in the anticompetitive practices of Big Tech companies.
- Last week, Senator Warren made a statement on Twitter about the acquisition, raising concerns that the purchase may affect "not just streaming and entertainment, but also workers, small businesses, and competition overall.".
- Recently, Senator Warren made a statement calling the Biden administration's designation of Lina Khan as Chair of the Federal Trade Commission "tremendous news" and "a huge opportunity to make big, structural change by reviving antitrust enforcement and fighting monopolies."
- Last month, Senator Warren delivered remarks at Freedom From Facebook and Google's virtual event calling to break up Big Tech.
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