Paramount Skydance’s arguments that its bid for Warner Bros. Discovery (WBD) faces a less fraught regulatory approval process thank Netflix’s competing bid is generally sound, but that doesn’t mean a Paramount/WBD deal would be smooth sailing before DOJ and the FTC.
A key difference between the two potential deals will be how antitrust regulators define the relevant market and how much market share the new companies would have. Some industry commentators speculate that a Netflix/HBO combination would have a 43% market share, greater than the 30% threshold for acquisitions involving competitors.
McCarter partner and former DOJ antitrust attorney Robin Crauthers spoke with Communications Daily and noted that Netflix/WBD could use a number of mechanisms to try to counter the 30% anticompetitive assumption trigger, such as arguing that the 43% share isn’t in the relevant market. She added that defining the relevant market will be based on data such as consumer activity and how customers use the products. Robin also noted that issues could be raised about reduced competition for purchasing content.
Robin went on that if Netflix does end up as the successful bidder and there is federal litigation to block the deal, the likely outcome would be a consent decree with settlements and conditions. This could include terms for licensing HBO content to other streamers.