The U.S. Department of Justice (DOJ) is conducting an expansive review of Netflix’s business practices as part of its examination of the streaming company’s proposed $82.7 billion acquisition of Warner Bros. Discovery’s studios and streaming assets, according to a report by The Wall Street Journal.
As part of the merger review, the DOJ has issued a civil subpoena seeking information from another entertainment company about whether Netflix has engaged in exclusionary or anti-competitive conduct that could entrench market or monopoly power. The subpoena reportedly asks the recipient to describe any behavior by Netflix that could reasonably be viewed as reinforcing dominance in the entertainment or streaming markets.
The DOJ is also examining whether the proposed transaction could harm competition more broadly, including its potential impact on creative talent. According to the report, the department has requested information on how previous mergers among studios or distributors affected competition for talent and how contractual terms differ across studios.
Netflix and Paramount Skydance are both pursuing acquisitions involving Warner Bros., attracted by its major film and television studios, extensive content library, and high-value franchises such as Game of Thrones, Harry Potter, and DC Comics properties including Batman and Superman.
Netflix has sought to downplay the scope of the government’s inquiry. A company spokesperson said Netflix is not aware of any investigation beyond the standard merger review process and described the company as “constructively engaging” with the DOJ. Steven Sunshine, a lawyer representing Netflix, stated that the company has received no indication that the department is conducting a separate monopolization investigation.
According to the Wall Street Journal, the DOJ’s review remains at an early stage.
In parallel, the DOJ is also reviewing Paramount’s proposed acquisition bid, which Warner Bros.’ board unanimously rejected as inadequate and not in shareholders’ best interests. Bloomberg News reported that Paramount is seeking to conclude the DOJ’s review of its tender offer within the coming weeks and has been providing requested information to regulators. Once that process is completed, a statutory 10-day waiting period will begin, during which the DOJ must decide whether to challenge the proposal on competition grounds.
Neither Paramount, Warner Bros., nor the DOJ immediately responded to requests for comment.
The scrutiny of Netflix’s bid comes amid growing political and regulatory attention. Netflix co-CEO Ted Sarandos was questioned by U.S. senators earlier this week regarding the deal’s potential effects on competition across the entertainment industry.
The proposed acquisition could also face regulatory review outside the United States. More than a dozen British lawmakers and former policymakers have urged the UK’s competition authority to launch a full investigation, while European Union antitrust regulators are expected to examine competing bids by Netflix and Paramount Skydance simultaneously, according to Bloomberg News.