WGA, Unions Push FTC to Contest Amazon-MGM Done Deal – CB

The Writers’ Guild of America West and a coalition of unions launched one other salvo in opposition to Amazon-MGM, urging antitrust watchdog, the Federal Commerce Fee, to contest the deal though it formally closed final week.

Their letter to the FTC at the moment targeted partly on Amazon’s buying MGM-owned Epix, taking out a producer and nascent streaming service, and it hit on earlier arguments that the Fee should forestall Amazon from “consolidating energy throughout the leisure trade, decreasing shopper selection and harming the artistic workforce.”

“We strongly imagine that that is an occasion the place the FTC should problem a deal post-merger, due to the outsized position Amazon performs in our economic system total, and the way the merger would improve Amazon’s potential to leverage its energy in opposition to staff within the leisure trade and throughout completely different platforms,” it mentioned.

The opposite labor unions, beneath the banner of the Strategic Organizing Middle, embrace Service Workers Worldwide; Worldwide Brotherhood of Teamsters; Communications Employees of America; and United Farmworkers of America — representing over 4 million staff.

The FTC doesn’t formally ‘approve’ offers. Fairly, a time-clock for assessment begins when one is introduced and may run out with the FTC both taking no motion, or suing to dam it – which requires a majority vote of commissioners. There are solely 4 in place at the moment, reportedly break up 2-2 alongside celebration traces on Amazon-MGM. The fifth commissioner awaits Senate approval.

FTC Chair Lina Khan, an aggressive antitrust enforcer, has written papers about dangers posted by Amazon’s dominance and was requested by the corporate to recuse herself from a assessment however declined.

The merger closed March 17 — final Thursday. Requested for remark, the tight-lipped FTC famous that it may problem a deal at any time.

“The FTC doesn’t touch upon any explicit issues. Nevertheless, we reiterate that the Fee doesn’t approve transactions and will problem a deal at any time if it determines that it violates the legislation,” a spokesperson mentioned.

“Moreover, this summer season the FTC introduced that it’s going to ship pre-consummation warning letters in reference to offers it can’t absolutely examine throughout the timelines established by the HSR Act. These letters alert merging events that their transactions stay beneath investigation, and warn that consummation happens at their very own threat.” (The HSR, or Hart-Scott-Rodino, Act requires events to proposed offers to submit premerger notification to the FTC and DOJ.)

Amazon decline to touch upon the letter from WGAW et al, or on whether or not it had acquired a “pre-consummation” warning.

The FTC has sued to dam accomplished offers a couple of instances: In 2020, it voted 5-0 to sue to unwind Altria’s $12.3 billion funding in rival JUUL Labs. It sued Fb the identical yr, alleging the social media big had maintained a monopoly by an extended course of anticompetitive conduct its 2012 acquisition of up-and-coming rival Instagram and its 2014 acquisition of cellular messaging app WhatsApp.

In Altria/JUUL, the case went to administrative courtroom the place a choose dominated to dismiss the grievance. The FTC workers has filed an attraction. For Fb, the case went to federal courtroom the place it had a rocky reception at first however litigation is ongoing.

Pundits usually have been skeptical there was a lot of an antitrust runway within the Amazon-MGM mixture given competitors within the streaming house and the truth that MGM, whereas a considerable studio, isn’t any big. Regulators allowed Comcast to purchase NBCUniversal, Disney to purchase Fox, and Discovery to merge with WarnerMedia, amongst others.

“The historical past of unhealthy mergers which have been permitted in media simply reveals the urgency to step up antitrust enforcement,” Laura Blum-Smith, WGAW Director of Analysis and Public Coverage, advised CB.

“Streaming has change into very vertically built-in, with all the main gamers targeted on producing content material for their very own streaming providers. Which means much less competitors between employers of writers and others within the trade, larger boundaries of entry for brand spanking new entrants, and an trade pushed in a course the place extra consolidation could be very possible, the place there might be simply 3 or 4 streaming firms in a couple of years,” she mentioned,

“That might be a horrible end result for range of content material, and this merger strikes us additional in that course in a number of methods. It eliminates MGM’s Epix community, which is a competing purchaser, will increase vertical integration and it’ll immediate reactive consolidation as different firms rush to bulk up in response.”

WGAW was distressed by the Disney-Fox merger. In Dec. of 2017 it issued the next assertion: “Within the relentless drive to remove competitors, large enterprise has an insatiable urge for food for consolidation. Disney and Fox have spent many years benefiting from the oligopolistic management that the six main media conglomerates have exercised over the leisure trade, usually on the expense of the creators who energy their tv and movie operations. Now, this proposed merger of direct opponents will make issues even worse by considerably rising the market energy of a mixed Disney-Fox company. The antitrust issues raised by this deal are apparent and vital. The Writers Guild of America West strongly opposes this merger and can work to make sure our nation’s antitrust legal guidelines are enforced.”

Final December, the guild printed a report known as Damaged Guarantees: Media Mega-Mergers and the Case for Antitrust Reform. It known as media “the poster little one for the failures of antitrust enforcement” and mentioned a wave of offers over the previous 12 years have led to “decrease wages, larger shopper costs, fewer or worse shopper decisions, and fewer innovation.”

On Amazon-MGM, SOC despatched a pair of letters to the FTC final yr outlining the hazards that Amazon’s “aggressive anti-competitive conduct within the streaming trade poses throughout the distribution chain.” WGAW had highlighted “threats to the artistic workforce posed by an more and more vertically and horizontally built-in leisure trade.”

In the present day’s missive was despatched to Holly Vedova, director of the FTC’s Competitors Bureau, by Blum-Smith and Michael Zucker, SOC Government Director. It slammed what it known as “Amazon’s distorted, retail-driven objectives.” The enormous firm has been upfront about utilizing Prime Video as a gateway into its Amazon Prime buyer loyalty program, the most important on the planet and the beating coronary heart of the corporate.

The letter additionally famous “the most recent felony referral by the Home Judiciary Committee to the Division of Justice stemming from Amazon’s allegedly false testimony earlier than Congress.” Earlier this month, a bipartisan group of lawmakers requested the DOJ to open an investigation into Amazon and its executives for probably felony obstruction of Congress. It’s not about media, however they alleged the corporate “engaged in a sample and follow of deceptive conduct” in responding to lawmakers’ e-commerce associated questions on its private-label practices and its assortment of third-party vendor information.