VICE News: Klobuchar Calls for Investigation of Amazon-MGM Megamerger
Amazon announced on Wednesday it would be taking over Metro-Goldwyn-Myer, the 97 year-old film studio in a $8.45 billion deal. The deal would be the second entertainment megamerger in as many weeks, following the announcement of a $43 billion merger between AT&T spin-off WarnerMedia and Discovery.
The deal allows Amazon to beef up its entertainment offerings in a big way, as it seeks to compete in the streaming space with its Prime Video service and draw more customers into its retail offerings.
“The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team,” said Mike Hopkins, senior vice president of Prime Video and Amazon Studios. “It’s very exciting and provides so many opportunities for high-quality storytelling.”
“In acquiring MGM Studios, Amazon is brazenly trying to take over another sector of the economy,” said Sarah Miller, Executive Director of the American Economic Liberties Project in a statement to Motherboard. “Congress should respond quickly by passing bipartisan legislation to ban mergers by large tech firms. And President Biden must appoint a full slate of smart, aggressive antitrust enforcers at the DOJ and FTC as soon as possible.”
The Biden administration has a few possible paths to take here. One remedy would be pursuing structural separation―a strict limitation on the types of businesses firms can enter. As likely incoming FTC member Lina Khan wrotein a paper on the idea, this would entail “proscribing entry in certain markets or by requiring that distinct lines of business be operated through separate affiliates.” If, for example, you own an e-commerce platform, then a structural separation regime would prohibit you from competing on that platform as Amazon does.