Paramount takeover of Warner Bros won't harm competition or consumers, DOJ says

A US Department of Justice (DOJ) investigation into the proposed Paramount Skydance acquisition of Warner Bros Discovery (WBD) has determined the merger is not likely to harm competition in the industry or be harmful to consumers.

The agency said it had closed its probe into the deal, with regulators in its antitrust division concluding the impact of the merger "will be to increase competition across the media and entertainment ecosystem, with benefits for American consumers and workers".

Paramount Skydance reached a deal to acquire WBD in February after months of negotiations, and after a rival bid by Netflix failed.

The companies argue the merger will be good for growth in the industry and will give consumers access to more content, especially if the HBO Max and Paramount+ libraries are combined.

However, critics have been cautious about what further consolidation could mean for an industry that is already controlled by a small number of major players.

Regulators considered whether the deal would hurt competition in video streaming and concluded it would likely increase competition by giving customers a more "robust competitive alternative" to larger video streaming alternatives.

The DOJ also determined YouTube, TikTok and other social media portals that also offer video streaming content "do not appear to be competitive substitutes here under well-established antitrust legal precedents, although they compete broadly for consumer attention".

Regulators also concluded the merger is not likely to harm competition for linear TV, citing strong competition for live programming.

They found the combination of two major film studio operators is not likely to harm competition in studio development, production or distribution of films for theatrical release.

"Instead, evidence shows extensive competition within the industry, which has generated greater output and diversity of film offerings, and is likely to continue unabated," the regulators concluded.

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David Ellison, the chief executive of Paramount Skydance, has vowed to keep Paramount and WBD as standalone movie studio operations and has pledged to release a combined 30 movies in cinemas a year.

Paramount has said the merger will lead to significant cuts due to duplication of roles.

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