Amazon’s $8 billion acquisition of MGM and its properties could still be blocked by the FTC, despite the deadline for a challenge passing.
Despite Amazon reportedly closing its $8.5 billion acquisition of MGM Studios last week, the Federal Trade Commission could still block the deal. The process, which began last May, would see Amazon acquiring the 98-year-old film production powerhouse, which amounts to around 4,000 film titles, 180 Academy Awards, and 17,000 episodes of TV. This would mean that Amazon would now own such storied properties as Rocky, Silence of the Lambs, Real Housewives, and MGM’s sizeable share of the James Bond franchise, which has led to some speculation as to whether or not we could be seeing a Bond TV show sometime soon.
When dealing with acquisitions of this nature, however, it is vital that companies such as Amazon don’t infringe on antitrust laws, put in place by institutions like the FTC and the EU. In the US, antitrust laws were first introduced at the beginning of the 20th century to stop monopolistic practices that might infringe on the rights of consumers and promote competition. The FTC, therefore, monitors acquisitions such as the Amazon-MGM deal in order to assess whether or not the merger of companies would create a monopoly. However, despite being given a mid-March deadline to block the deal, the FTC failed to file a legal challenge, therefore removing a roadblock preventing Amazon from signing the dotted line. This means then that the acquisition looks like a done deal especially after it received unconditional approval from the EU’s antitrust regulator.
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It might not be that simple, however, as according to Variety, the FTC may still block the acquisition if it believes it violates antitrust laws. In a statement released after the mid-March deadline expired, the FTC clearly stated that they are able to challenge a deal whenever they choose and that their job is not to approve any transactions. Therefore, regardless of whether or not Amazon and MGM have made anything official, the FTC still possesses the power to block the purchase.
This could be a worrying sign for Amazon, especially considering that the current chair of the FTC, Lina Khan, is a noted critic of the company. The 33-year-old rockstar antitrust lawyer has made a name for herself as an enemy of big tech companies. This was made particularly evident when, only a few weeks after her appointment, Amazon and Facebook requested that she be recused from antitrust investigations for fears that she wouldn’t be impartial. With a strong hand such as hers at the wheel, Amazon might have reason to believe that the FTC will flex its powers and prevent the acquisition.
Where the Amazon-MGM deal goes in the future is therefore still up in the air, and while the possibility of bringing MGM’s rich history to streaming is enticing for consumers, perhaps it is best to take it slow. This would be Amazon’s second-largest acquisition to date, surpassed only by its $13 billion purchase of Whole Foods supermarkets in 2017, and would further cement the retail giant’s omnipresent position in our lives. Competition is important for progress, and it would be a real shame to see one of the great film studios swallowed up by the machinations of the corporate world, even if it does mean we get to see 007 on the small screen.
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