A report last week in The Information indicates that the U.S. Federal Trade Commission (FTC) is gearing up to challenge Amazon on its acquisition of MGM Studios.
The FTC’s challenge has been viewed as likely, particularly since the appointment of its new chair Lina Khan by the Biden administration. Khan became well-known for her stance in opposition to big tech consolidation, when she published a scholarly article in 2017 entitled “Amazon’s Antitrust Paradox.” In her telling, she disputes the notion that a monopoly should be measured solely by whether a consumer winds up paying more for a service.
That interpretation leaves out the practices of tech giants, whose services are often provided to the consumer at a low cost, or even for free, but which nonetheless result in a consumer’s detriment. She cited Amazon’s acquisition of Whole Foods as a prime example, a takeover that holds many similarities to that of MGM.
Even if the FTC proceeds with its challenge, it may have a difficult time convincing others that the result would be monopolistic and anti-competitive. While Amazon does have a significant share of the streaming market, its Prime Video service is widely viewed as less influential than the streaming services from Netflix and Disney. However, exhibitors may prefer MGM to remain an independent studio, since this would more likely result in future MGM titles being released to theatres, rather than redirecting to Prime Video as a means to boost streaming subscribers.
See also: Amazon Moves to Force FTC Antitrust Decision on MGM Deal (Wall Street Journal)
