Teamsters, WGA, Other Unions Urge FTC to Challenge Amazon-MGM Done Deal – Deadline


The Writers Guild of America West and a coalition of labor unions launched another salvo against Amazon-MGM, urging the Federal Trade Commission to challenge the deal, even though it was officially finalized last week.

Her letter to the FTC today focused in part on Amazon’s acquisition of MGM-owned Epix, its acquisition of a producer and a nascent streaming service, and echoed previous arguments that the FTC must prevent Amazon from “shaping power in across the entertainment industry, reducing consumer choice and harming the creative workforce.”

“We strongly believe this is a case where the FTC needs to challenge a post-merger deal because Amazon plays an outsized role in our economy at large and the merger would enhance Amazon’s ability to exercise its power against workers in the entertainment industry and to be used on different platforms,” ​​the groups said.

Under the Strategic Organizing Center banner, other unions representing over 4 million workers include Service Employees International, International Brotherhood of Teamsters, Communications Workers of America and United Farmworkers of America.

The FTC does not formally “authorize” transactions. Rather, a timer for the review starts when one is announced and can expire if the FTC either does nothing or files a stall — which requires a majority decision by the commissioners. There are currently only four, reportedly split 2-2 along party lines at Amazon-MGM. The fifth commissioner is awaiting Senate approval.

FTC Chair Lina Khan, an aggressive antitrust enforcer, has written papers about risks made public by Amazon’s dominance and has been asked by the company to resist scrutiny, but declined.

The merger was completed on March 17th – last Thursday. Asked for comment, the taciturn FTC noted that it could contest a deal at any time.

“The FTC does not comment on specific matters. However, we reiterate that the commission does not authorize transactions and can at any time challenge a transaction if it determines it violates the law,” a spokesman said.

“Additionally, the FTC announced this summer that it will issue pre-completion warning letters related to transactions that it cannot fully investigate within the timeframes set by the HSR Act. These letters alert the Merging Parties that their transactions remain under investigation and caution that consummation is at their own risk.” (HSR or Hart-Scott-Rodino Act requires parties to proposed transactions to they submit a pre-notification to the FTC and DOJ.)

Amazon declines to comment on the letter from WGAW et al.

The FTC has sued a few times to block completed deals: In 2020, it voted 5-0 to sue Altria’s $12.3 billion investment in rival JUUL Labs. It sued Facebook that same year, claiming the social media giant had maintained a monopoly through long-standing anti-competitive behavior, its 2012 acquisition of rising rival Instagram and its 2014 acquisition of mobile messaging app WhatsApp.

In Altria/JUUL, the case went to an administrative court, where a judge dismissed the claim. The FTC official has appealed. For Facebook, the case went to federal court, where it initially had a bumpy reception, but litigation is ongoing.

Experts were generally skeptical that the Amazon-MGM combination had a major antitrust runway given the competition in the streaming space and the fact that MGM, while a major studio, isn’t a giant. Among other things, regulators allowed Comcast to buy NBCUniversal, buy Disney Fox and merge Discovery with WarnerMedia.

“The history of bad mergers being approved in the media only demonstrates the urgency to step up antitrust enforcement,” Laura Blum-Smith, WGAW director of research and public policy, told Deadline.

“Streaming is now very vertically integrated, with all the big players focused on producing content for their own streaming services. That means less competition between writers’ employers and others in the industry, higher barriers to entry for newcomers, and an industry being pushed in a direction where more consolidation is very likely, where there will only be 3 or 4 in a couple of years streaming companies could give,” she said

“That would be a terrible outcome for content diversity, and this merger takes us further in that direction in more ways than one. It eliminates MGM’s Epix network, which is a competing buyer, increases vertical integration and will result in reactive consolidation as other companies push to scale in response.”

WGAW was rocked by the Disney-Fox merger. In December 2017, she released the following statement: “In a relentless quest to eliminate competition, large corporations have an insatiable appetite for consolidation. Disney and Fox have spent decades profiting from the oligopolistic control that the Big Six media conglomerates have exercised over the entertainment industry, often at the expense of the creators who run their television and film operations. Now this proposed merger of direct competitors will make matters worse by significantly increasing the market power of a combined Disney-Fox corporation. The antitrust concerns raised by this transaction are obvious and significant. The Writers Guild of America West strongly opposes this merger and will work to enforce our country’s antitrust laws.”

Last December, the guild released a report called Broken Promises: Media Mega-Mergers and the Case for Antitrust Reform. It called the media “the poster child for antitrust enforcement failures” and said a spate of deals over the past 12 years has resulted in “lower wages, higher consumer prices, fewer or worse consumer choices, and less innovation.”

On Amazon-MGM, SOC sent two letters to the FTC last year outlining the dangers that Amazon’s “aggressive anticompetitive behavior in the streaming industry poses throughout the distribution chain.” The WGAW had highlighted “threats to the creative workforce posed by an increasingly vertically and horizontally integrated entertainment industry.”

Today’s letter was sent by Blum-Smith and Michael Zucker, SOC Executive Director, to Holly Vedova, Director of the FTC’s Competitions Office. It beat what it called “Amazon’s distorted, retail-driven targets.” The giant has used Prime Video as a gateway to its Amazon Prime customer loyalty program, the largest in the world and the beating heart of the company.

The letter also noted “the recent criminal referral by the House Judiciary Committee to the Department of Justice based on Amazon’s alleged false testimony before Congress.” Earlier this month, a bipartisan group of lawmakers asked the DOJ to open an investigation into Amazon and its executives for potentially criminal obstruction of Congress. It’s not about media, but they claimed that the company was “engaged in a pattern and practice of deceptive behavior” in responding to e-commerce-related questions from lawmakers about its private label practices and its collection of third-party seller data .


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