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WASHINGTON – The Federal Trade Commission will be the agency responsible for reviewing Amazon. The proposed acquisition of AMZN 1.48% com Inc. On Hollywood studio MGM, according to people familiar with the matter, just as the committee gets a new chairwoman who criticizes the internet giant’s expansion.
Amazon last month announced its MGM deal, which will boost its Prime Video platform in a market that includes competitors like Netflix Inc. and Walt Disney Co. MGM has a library of more than 4,000 films, including the James Bond franchise, and a television catalog that includes “The Handmaid’s Tale” and “Vikings”.
Firms undertaking large mergers must submit their deals for government antitrust review. The FTC shares antitrust authority with the Department of Justice, and the two agencies have split the work of reviewing proposed deals. The division recently reviewed transactions involving video content, including Disney’s acquisition of 21st Century Fox and the acquisition of AT&T Inc. on Time Warner, a deal the administration tried unsuccessfully to prevent in court.
During recent interagency negotiations, the FTC secured the right to review the Amazon-MGM deal, people familiar with the matter said. The people said the Federal Trade Commission pushed for jurisdiction over the merger review because it already had an open, wide-ranging antitrust investigation into Amazon’s business practices.
The Federal Trade Commission and the Department of Justice previously agreed to divide investigations into the conduct of four leading tech giants, with the division taking Apple, Google Inc. Alphabet Inc. and Google Inc., while the FTC acquired Facebook and Amazon.
There was no immediate comment from an Amazon spokesperson. An FTC spokeswoman declined to comment.
MGM’s library of more than 4,000 movies is expected to boost the Amazon Prime Video streaming platform. Photo: Eric Thayer/Bloomberg News
The MGM review could provide an early test of new FTC chair Lena Khan, who has made her name in antitrust circles largely by criticizing Amazon. She wrote a widely read legal review article while at Yale Law School in which she argued that US antitrust law failed to constrain online retailers.
Ms. Khan has argued more broadly that antitrust enforcement needs far-reaching changes to better rein in dominant firms. She got confirmation from the Senate last week to be a delegate to the Federal Trade Commission, and then President Biden immediately appointed her as chair.
Amazon is a growing producer of its own video content and has become a strong buyer of sports rights, including the NFL rights. But it still has a relatively modest library compared to the traditional media giants.
MGM is now one of the smallest studios in Hollywood, which means the engagement isn’t necessarily the kind of transaction that in the past would have raised immediate red flags about the anti-competitive focus. But given Amazon’s broader market footprint, the addition of MGM could raise concerns about expanding the online giant’s platform, which critics in Washington already think is too powerful.
Joe Flint contributed to this article.
Write to Brent Kendall at [email protected]
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