At a meeting on Tuesday, members of the U.S. Senate antitrust subcommittee from both parties expressed their concerns about potential decreases in competition, rising prices, and negative impacts on theaters if the merger is approved.
The current deal under review by the U.S. Department of Justice would give Netflix control over Warner Bros. studios and the HBO Max streaming service.
Meanwhile, rival company Paramount Skydance continues to vigorously promote its alternative bid to acquire Warner Bros.
During the questioning, senators demonstrated bipartisan resistance to the merger, with the Department of Justice having the final say on whether to approve or block the deal.
Senators asked Netflix co-CEO Ted Sarandos about the fate of theaters, the impact of the merger on subscription prices, and industry workers. Sarandos assured that Netflix would continue to release Warner Bros. films in theaters for 45 days—which is the industry standard—and promised to maintain studio management at current levels.
He argued that the merger of the two companies would allow for more content to be offered at a lower price, adding that 80% of HBO Max users are also subscribed to Netflix.
Furthermore, he insisted that the merger would lead to the creation of new jobs in America.
However, Republican Senator Mike Lee warned that the merger of two major employers could negatively affect competition for labor.
Despite concerns about competition, some Republicans also raised issues of cultural policy, with Senator Eric Schmitt accusing Netflix of having content that is predominantly progressive.
It is worth noting that David Ellison, CEO of Paramount, who is still trying to acquire Warner Bros. despite numerous rejections, was not present at the hearings.
Paramount, backed by billionaire Ellison, claims that their $108 billion offer is more advantageous.
Critics of both merger proposals argue that if either deal is approved, it will lead to excessive concentration of power in the hands of one company.
Democratic Senator Cory Booker called the absence of a Paramount representative at the hearings "disappointing" and noted that Ellison declined his invitation to speak.
“As a result of either merger, one corporation will gain greater control over what we see and hear,” Booker said.
In an effort to strengthen its position in the battle with Paramount for the Hollywood studio, Netflix recently updated its terms, offering to pay for the deal entirely in cash, unlike the initial plan that included stock.
The hearings also discussed whether YouTube, owned by Alphabet, is a serious competitor to Netflix.
Sarandos argued that “we compete for the same content and audiences, as well as for the same advertising dollars,” adding that “YouTube is no longer just a platform for cat videos; it is full-fledged television.”
However, some lawmakers, including Lee, expressed doubts about these claims, believing that YouTube should not be considered a competitor. Paramount also dismissed these arguments.
