Friday, March 24, 2023

WGA, Public Interest Groups Ask FTC To Block Amazon-MGM Deal; Slam “Clear Pattern Of Monopolistic Practices”

Thirty-four groups from the Writers Guild of America West to Public Citizen to Demand Progress have appealed to the Federal Trade Commission to block Amazon’s proposed acquisition of MGM, which they say reflects the e-commerce giant’s growing dominance.

The $8.45 billion deal announced in May – which hands Amazon MGM’s content library including the James Bond and Rocky franchises — “is not simply a one-off deal for streaming content; it is the latest move in Amazon’s overarching strategy to create numerous interconnected points of dominance over businesses and consumers,” said the letter sent Tuesday to the FTC Chair Lina Khan. Read it here.

Earlier this month, a coalition of labor unions representing nearly four million workers also lobbied the Commission to block the deal, citing harmful vertical integration in the film business.

The merger is designed to enhance Amazon Prime Video as a draw for the Amazon Prime loyalty program, the company’s growth engine.

Laura Blum-Smith, Director of Research and Public Policy, Writers Guild of America West, said: “Amazon’s unparalleled breadth of control in media—from Amazon Studios content to Prime Video streaming to the Fire Stick and Channels store—overlaps with and echoes its dominance in e-commerce and numerous other areas of our economy. Its entrenched market power fueled by vertical integration ultimately hurts workers, consumers, and competition.”

The FTC must block Amazon from buying MGM and further threatening competition in the media ecosystem,” she said in a statement echoing the letter.

The letter calls the merger “a clear example of Amazon’s larger pattern of monopolistic practices, citing accusations over the years that it strong-arms and undercuts retailers on its platform, surveilling and copying successful products to sell under one of its own lines.

Owning MGM would give Amazon yet another pressure point, the group argued. Consumers “will be more forcefully pushed into subscribing to Amazon Prime because more content will be exclusive” there rivals to FireTV would be disadvantaged; and “the additional business and consumer data Amazon will acquire through MGM will further entrench Amazon’s one-sided information advantage over other businesses that depend on its platform.”

“With more control over the streaming, advertising, and media distribution ecosystem Amazon can extract unfair concessions from independent content producers and workers in the industry. All of this means Amazon can exert greater control even outside of the portions of commerce it directly owns. And ultimately it means consumers, businesses, and the workers that depend on them are subject entirely to Amazon’s whims.”

Amazon said in May it expected the MGM deal to close mid-next year. It also asked that recently installed FTC chair and antitrust reformer Khan recuse herself, but the request was nixed. A paper Khan wrote for the Yale Law Journal in 2017 called “Amazon’s Antitrust Paradox”  said the company has evaded antitrust scrutiny by “fervently devoting its business strategy and rhetoric to reducing prices for consumers.” Reformist thinkers on antitrust law increasingly believe it should also consider producers and the health of a market as a whole.

Politicians and state AGs have also been coming down on big tech with hearings and lawsuits against Amazon, Google and Facebook.


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