More than 30 members of Congress have signed a letter to the U.S. Justice Department calling for an antitrust review of the proposed WarnerMedia-Discovery merger.
The group—which includes Senator Elizabeth Warren and U.S. Representative Alexandria Ocasio-Cortez—sent the letter to U.S. Attorney General Merrick Garland and Assistant Attorney General Jonathan Kanter to express “serious concerns” over the $43 billion deal that would combine the two media giants.
“In particular, the merger threatens to enhance the market power of the combined firm and substantially lessen competition in the media and entertainment industry, harming both consumers and American workers. In light of these concerns, we respectfully urge the Department to conduct a thorough review of this transaction to ensure that it does not harm American consumers and workers by illegally harming competition,” the group wrote.
In August, Discovery CEO David Zaslav (who will head up the proposed combined company, Warner Bros. Discovery) said he was recently in Washington, D.C. and didn’t pick up on any potential headwinds for the deal that will bring together HBO Max and Discovery+ under one banner.
“There’s broad support for this transaction. We haven’t heard any pushback, we haven’t seen any public pushback,” he said.
However, today’s letter seems to contradict those statements.
In the letter, the group of Congress members pointed toward President Biden’s executive order to promote competition, which warns that “excessive market concentration threatens basic economic liberties, democratic accountability, and the welfare of workers, farmers, small businesses, startups and consumers.” The group also noted the DOJ’s recent lawsuit to block Penguin Random House’s proposed acquisition of Simon & Schuster, explaining that it “will cause harm to American workers, in this case authors, through consolidation among buyers—a fact pattern referred to as ‘monopsony.’”
Specific to the proposed WarnerMedia-Discovery merger, the group said Government Accountability Office found that the media and entertainment industry had a lower rate of Hispanic workers than any other sector.
“Additional consolidation is likely to eliminate competition for these workers and reduce the number of employment opportunities for Hispanic individuals looking to enter the industry. That is why it is so crucial for the Department to vigorously enforce the antitrust laws to combat monopsony power, leading companies to compete for the most talented, productive, inclusive, and diverse workforces,” the group wrote.
At issue is also the potential for the merger to reduce the amount of diverse and inclusive media and entertainment content available to consumers. Finally, the group claimed that recent consolidation in the media and entertainment marketplace has led to higher prices for consumers, “and all too often the merging parties have failed to deliver benefits and broken promises made to the public, to Congress, and to antitrust enforcers.”