Netflix's Warner Bros. deal sparks antitrust battle in the US

Netflix shocked the market on Friday by announcing plans to acquire Warner Bros., the iconic film studio, and its streaming service HBO Max for $72,000 billion. This would be the biggest global pairing of two streaming services, but the challenge now is that antitrust regulators are highly skeptical of the deal and are likely to scrutinize it closely.

December 7, 2026 – CNBC reports that Netflix's announcement of plans to acquire Warner Bros. for $72 billion will create a pairing of the two largest global streaming services and increase the power of Netflix, which has previously revolutionized the media industry many times. Netflix reports that it has about 300 million users worldwide, while HBO Max has about 128 million customers.

According to Sensor Tower, Netflix holds a 46% share of monthly active mobile app users in the global streaming market, and when combined with HBO Max, that number rises to 56%.

Analyst William Blair stated in a research note, “This deal reinforces Netflix’s status as a truly leading streaming service for original content. The scale of the deal has generated intense interest and scrutiny from both industry insiders and U.S. legislators.”

According to CNBC on Friday, the Trump administration has serious doubts about the deal, with Senator Elizabeth Warren calling for an antitrust investigation, stating, "This deal looks like a Netflix–Warner Bros. monopoly nightmare. It will create a giant corporation that controls nearly half the streaming market, potentially leading to higher subscription prices and fewer choices for Americans on what and how they watch, while also putting American jobs at greater risk."

The deal also gives Netflix a controlling stake in the iconic Warner Bros. studio, one of Hollywood's major film studios, raising concerns that the release window and the number of popular films released could be "squeezed down" as the industry consolidates.

However, after the initial announcement of such a large deal, it's common for interest groups, politicians, and industry competitors to raise antitrust concerns. The US Department of Justice (DOJ) is likely to be the primary reviewing agency for the deal, as it has done with other media mergers in the past, a process that can take anywhere from months to more than a year.

Netflix stated on Friday that the transaction is expected to be completed within 12–18 months, following the spin-off of Warner Bros. Discovery's cable network into a new company, Discovery Global. Netflix co-CEO Ted Sarandos expressed great confidence that the deal would receive regulatory approval, stating, "This deal benefits consumers, benefits innovation, benefits workers, benefits creators, and benefits economic growth. Our plan is to work closely with all governments and regulators, and we are very confident that we will receive all the necessary approvals."

Under the terms of the deal, Netflix agreed to pay Warner Bros. Discovery up to $5.8 billion in blocked deals if the government doesn't approve it, a bid Netflix beat out competitors like Paramount-Skydance and Comcast.

Analysts from Deutsche Bank and William Blair believe the deal has at least some degree of "probability of passing." Deutsche Bank stated that, based on information from former DOJ experts, this type of deal is unlikely to present significant antitrust issues regardless of which of the three bidders chooses to buy. However, the analysts emphasized that "we don't yet know all the in-depth facts that the DOJ will gather and analyze, and we don't know which judge will preside over the case, both of which will certainly affect the outcome."

CNBC also reported that Netflix's rival Paramount is continuing to mount pressure, with lawyers for the company sending a letter to Warner Bros. Discovery claiming the sale process was staged to benefit Netflix. Meanwhile, The Wall Street Journal reported that in a separate report, Paramount said the deal with Netflix is ​​unlikely to close due to regulatory hurdles.

Wall Street analysts predicted that President Donald Trump's second term would usher in a golden age of mergers and acquisitions. However, economic uncertainty has slowed deals for some companies, and regulatory hurdles have played a bigger role than many anticipated.

"Under the Trump administration, the antitrust review process has become a cesspool of political favoritism and corruption. The Justice Department must enforce the nation's antitrust policies fairly and transparently, not use the Warner Bros. deal as a vehicle for influence peddling and bribery," Senator Elizabeth Warren said in a statement Friday.

Paramount's merger with Skydance had been up in the air for more than a year before finally receiving federal approval in July. The Federal Communications Commission (FCC), which is unlikely to have a role in the Netflix-WBD merger review because it doesn't involve broadcast operators, approved the $8 billion merger shortly after Paramount agreed to pay Trump $16 million to settle a lawsuit over the editing of a “60 Minutes” interview with former Vice President Kamala Harris. Paramount also halted its diversity, equity, and inclusion (DEI) policy earlier this year after the FCC said it would investigate the company over the programming.

In September, the newly merged Paramount Skydance, under the management of David Ellison, turned its attention to Warner Bros. Discovery, with the company considering making an aggressive, direct offer to WBD shareholders to dethrone Netflix, the current bidder, according to a CNBC report on Friday.

David's father is Larry Ellison, co-founder of Oracle and a billionaire known for his close ties to Trump.

The debate over whether to approve Netflix's acquisition of Warner Bros. will hinge on two key questions about the streaming market, specifically: how prices affect consumers and how Netflix defines the audience.

Streaming subscription prices have been rising across the industry in recent years, and in 2022, Netflix launched a cheaper, ad-supported plan after long refusing to embrace the model, aiming to grow its user base. The following year, Disney followed suit with a similarly affordable plan.

Netflix is ​​already known for shaking up the traditional media industry. The company ended DVD rentals in 2023 and is now focusing entirely on streaming. As a result, the company has grown exponentially and dominated popular culture with originals like “Squid Game,” “Wednesday,” “Stranger Things” and “Bridgerton.”

Netflix's bold approach and ever-expanding influence in the industry could prove to be an advantage in persuading regulators.

Jeff Goldstein, Partner Executive and Managing Director of AlixPartners , and co-leader of the U.S. media group, said, “I expect Netflix to push the broadest possible interpretation of its market, encompassing free-to-play TV, cable, subscription streaming, and ad-supported streaming, and, most importantly, including YouTube.”

YouTube has emerged as the dominant market player when it comes to viewing. Nielsen's October report again noted that YouTube has the largest share of TV traffic, while Netflix is ​​in sixth place and Warner Bros. Discovery is in seventh. Legacy media outlets like Disney, NBCUniversal, Fox and Paramount occupy the middle, while opponents of the deal will narrow the scope of Netflix to point to excessive market dominance.

Media giant John Malone told CNBC in November, when asked about the antitrust issues surrounding the WBD sale, "I don't see streaming as a category, but rather as television viewing, or perhaps as viewership. But if you want to broaden the category to that extent, you'd have to include YouTube, Facebook, and social networks like TikTok. That's the big question: Is streaming a category? Are studios a category? And how rigorously will that be scrutinized? Those are very difficult regulatory matters."

Reference: www.cnbc.com

Read news related to All situations around the world can be found here.