Netflix has found itself facing a consumer lawsuit aimed at halting its proposed $72 billion acquisition of Warner Bros. Discovery’s studio and streaming divisions. The class action was initiated by a subscriber of HBO Max, claiming that the merger poses a threat to competition in the U.S. subscription video-on-demand market.
Lawmakers have expressed concerns regarding Netflix’s acquisition, which is anticipated to undergo significant scrutiny from U.S. regulatory bodies to ensure compliance with antitrust laws. The complexity of these laws allows consumers to file lawsuits about mergers and acquisitions independently from federal agency actions, although such cases encounter considerable legal challenges.
In a competitive response, Paramount Skydance has launched a hostile bid worth $108.4 billion for Warner Bros. Discovery, directly contesting Netflix’s move. This development highlights the ongoing rivalry in the streaming sector, where giants are vying for control and market dominance.
Netflix, regarded as the largest streaming service globally, released a statement asserting that the lawsuit is without merit and appears to be a strategic maneuver by the plaintiffs to capitalize on the deal’s publicity. The complaint points to Netflix’s history of increasing subscription prices, suggesting a willingness to do so even amidst competition from significant players like Warner Bros. Discovery.
The lawsuit also argues that the acquisition would eliminate HBO Max as one of Netflix’s main competitors, potentially leading to greater control over Warner Bros. esteemed franchises, including those associated with Harry Potter, DC Comics, and Game of Thrones. Notably, Warner Bros. is not named as a defendant in the lawsuit.
The law firm behind this case, Bathaee Dunne, has a history of pursuing antitrust actions against various significant entertainment and financial entities. Their past cases include representation for subscribers of YouTube TV in a lawsuit against The Walt Disney Co., asserting similar competitive concerns in the streaming market.
The case has been filed as Michelle Fendelender v. Netflix in the U.S. District Court for the Northern District of California, signaling an intense phase of scrutiny and contention in the entertainment marketplace as companies maneuver for consumer attention and regulatory approval.