The Federal Trade Commission will reportedly scrutinize Amazon’s proposed $8.45 billion acquisition of Hollywood’s MGM Studios, just as the regulator gets a new chairwoman who has been a critic of the tech giant’s expansion.
Large company mergers and acquisitions have to get approval for their deals from the federal government’s antitrust authorities, either the Justice Department or the FTC, and the Wall Street Journal on Tuesday reported that the FTC will handle this purchase.
The review will likely be the first test of President Joe Biden’s new FTC Chairwoman Lina Khan, who was confirmed by the Senate last week and is well known in tech circles for her criticism of Amazon.
As a student at Yale Law School in 2017, Khan’s article “Amazon’s Antitrust Paradox” argued that antitrust law had not adequately restrained what she called anti-competitive behavior by the retail giant.
Amazon announced in late May that it had struck a deal to acquire MGM, boosting its ability to become a top player in Hollywood and expanding its online streaming services.
ANTI-BIG TECH ANTITRUST PUSH EXPECTED UNDER BIDEN
The acquisition is the second-largest deal in Amazon’s history, after its $13.7 billion takeover of Whole Foods in 2017.
MGM, home of the James Bond franchise, has long been one of the biggest studios in Hollywood, with over 4,000 films and 17,000 TV shows, which Amazon hopes to tap into as part of Amazon Studios, its film and television department.
The deal also signals Amazon’s desire to spend and acquire in order to reach its growing ambitions in the entertainment industry and remain competitive in the increasingly crowded online streaming market.
Streaming giants such as Netflix and Disney have also spent billions to create more original programming and license older content in order to strengthen online content and keep subscribers.
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Amazon did not respond to a request for comment. The FTC also did not respond to a request for comment at the time of publication.
