Netflix, the world's largest streaming service, has emerged victorious in the acquisition battle for the Hollywood giant Warner Brothers Discovery (hereafter Warner Brothers), but there are reports that a 100% completion of the acquisition cannot be guaranteed. This is because approval from the Donald Trump administration remains a significant hurdle.
According to the Wall Street Journal (WSJ) on December 5 (local time), the U.S. Department of Justice has already begun reviewing the potential impact of Netflix's acquisition of Warner Brothers on the dominance of the streaming market.
The White House is also closely monitoring the deal, and President Trump's aides have reportedly expressed concerns regarding the acquisition.
President Trump is known to have a close relationship with David Ellison, CEO of Paramount, who competed with Netflix in the acquisition, as well as with Ellison's father, Larry Ellison, the founder of Oracle.
As a result, some observers speculate that President Trump could pressure antitrust authorities to allow Paramount to acquire Warner Brothers. Paramount has already claimed that Warner Brothers negotiated in favor of Netflix, arguing that this constitutes a "preferential acquisition."
The core issue in the merger review is the streaming market share. If Netflix and Warner Brothers' streaming service, HBO Max, are combined, they would account for about 30% of the U.S. subscription-based streaming market. According to guidelines established by the Department of Justice in 2023, if the merged company's market share exceeds 30%, direct mergers between competitors are considered illegal.
Netflix maintains that free video platforms such as YouTube, Facebook, and TikTok should also be included in the streaming market, and asserts that there is no evidence that the HBO Max merger would reduce competition or harm consumers.
If Netflix fails to obtain government approval, it has been confirmed that the company will have to pay Warner Brothers $5.8 billion (about 8.5 trillion won). This amount corresponds to 8% of the total acquisition price of $72 billion (about 106 trillion won).
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
