007 wants to know...What happened to Joe Biden’s All-Star Antitrust Team?
On Thursday, Amazon closed its mammoth $8.45 billion deal with MGM, which will bring James Bond and an assortment of other blockbuster classics under the e-commerce giant’s ever-expanding wings. The deal marks Amazon’s second most expensive acquisition after Whole Foods in 2017 and comes despite reports of a months-long Federal Trade Commission investigation.
Amazon announced the deal’s closure via a blog post, saying MGM will join Prime Video and Amazon Studios. Moving forward, Amazon will add MGM’s vast catalog of more than 4,000 films and 17,000 TV shows to its own offerings, beefing up its library in combat over content with other players in streaming TV. Aside from the world’s most famous martini drinker, some of MGM’s most recognizable IPs include The Pink Panther, Silence of the Lambs, and the TV series Fargo.
“MGM has a nearly century-long legacy of producing exceptional entertainment, and we share their commitment to delivering a broad slate of original films and television shows to a global audience,” Prime Video and Amazon Studios Senior Vice President Mike Hopkins said in a statement. “We welcome MGM employees, creators, and talent to Prime Video and Amazon Studios, and we look forward to working together to create even more opportunities to deliver quality storytelling to our customers.”
Though the deal undoubtedly marks a huge win for Amazon in its quest for content, it also reignited criticism from consumer advocacy groups and corporate accountability groups like the American Economic Liberties Project.
“Amazon’s $8.45 billion deal to acquire MGM is the latest in an unprecedented wave of massive mergers that has increased prices across the country and strained antitrust enforcement,” American Economic Liberties Project Senior Policy Analyst Krista Brown told Gizmodo in an emailed statement. “Congress must respond by increasing funding and resources for the FTC, despite calls from corporate leaders—and even some FTC Commissioners—to defund antitrust law enforcement.”
Amazon’s path to this point was littered with potential regulatory minefields it managed to dance around. Earlier this week, The European Commission unconditionally approved the deal after conducting a months-long investigation. Ultimately the commission concluded the deal “would raise no competition concerns in the European Economic Area.” The FTC’s investigation dates back to July, where regulators searched, among other things, for evidence of ways the deal could grant Amazon an illegal competitive advantage. Amazon lashed out at the FTC during the process, even going as far as to send a 25-page motion calling on the organization to recuse Chair Lina Khan from antitrust investigations due to her previous statements critical of Amazon.
It’s still unclear what, if anything, that investigation dug up. Regardless, Amazon forced the FTC’s hand earlier this month by certifying it had provided all information requested by investigators. That, in effect, triggered a mid-March deadline for the FTC to decide whether or not they would file a lawsuit, according to The Wall Street Journal.
In an email to Gizmodo, an FTC spokesperson would not elaborate on details of the investigation but added that further action was not necessarily off the table.
“We reiterate that the Commission does not approve transactions and may challenge a deal at any time if it determines that it violates the law,” the spokesperson said. “Additionally, this summer the FTC announced that it will send pre-consummation warning letters in connection with deals it cannot fully investigate within the timelines established by the HSR Act. These letters alert merging parties that their transactions remain under investigation, and warn that consummation occurs at their own risk.”
Gizmodo reached out to Amazon, which declined to comment on the record.
The acquisition deal drew immediate and immense scrutiny from lawmakers and consumer advocates alike when it was announced last May. Four months later, a coalition of 32 advocacy organizations sent a letter to Khan, urging her to block the deal which they argued would “further entrench Amazon’s one-sided information advantage over other businesses that depend on its platform.” Democratic Sens. Elizabeth Warren, Amy Klobuchar, Rep. David Cicilline, and Republican Sen. Josh Hawley similarly all released their own statements speaking critically of the deal.
Wide swaths of the general public apparently share those concerns as well. According to a poll shared with Gizmodo by the Tech Oversight Project, 52% of U.S. voters last year said they would support the federal government blocking the Amazon-MGM merger.
Despite all that documented support for more regulatory action and an administration supposedly stacked full of eager antitrust crusaders, Amazon’s MGM deal did pass. Really, that’s just more of the same. Company mergers and acquisitions reached a record pace in 2021, with over 1,047 deals struck worth at least $100 million each. And if you thought Amazon’s purchase broke the bank, keep in mind this year Microsoft already announced its interest in acquiring video game maker Activision for an estimated $68.7 billion.
So what’s next? Though the FTC failed to file a suit, Brown of the American Economic Liberties Project said the agency still theoretically has the ability to “block or unwind any merger they find to be illegal before or after the deal is complete.” There’s also a growing stew of antitrust legislation being considered that, if passed, could open mergers like Amazon’s up to renewed scrutiny. Just this week, Democratic lawmakers proposed new legislation which would, among other things, let the Justice Department and Federal Trade Commission automatically block mergers worth more than $5 billion. But with midterms poking their head around the corner, time’s running out for Democrats and the Biden Administration to actually act on their antitrust promises.