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US Justice Department casts wide net on Netflix's business practices in merger probe, WSJ reports
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US Justice Department casts wide net on Netflix's business practices in merger probe, WSJ reports
Mar 11, 2026 3:20 AM

Feb 6 (Reuters) - The U.S. Department of Justice is investigating whether Netflix ( NFLX ) used anti-competitive tactics as part of the streaming giant's proposed $82.7 billion acquisition of Warner Bros Discovery's ( WBD ) studios and streaming service, the Wall Street Journal reported on Friday.

In a civil subpoena viewed by the WSJ, the department asked another entertainment company to "describe any other exclusionary conduct on the part ‌of Netflix ( NFLX ) that would reasonably appear capable of entrenching market or monopoly power".

Netflix ( NFLX ) and Paramount Skydance ( PSKY ) covet Warner Bros for its leading film ​and television studios, extensive content library and franchises such as "Game of Thrones", "Harry Potter" and DC Comics' superheroes ‍Batman and Superman.

In its subpoena, the department asked whether either deal could ⁠hurt the competition. It also ⁠asked how past mergers of studios or distributors had affected competition for creative talent and sought information on how talent contracts vary ‌between studios, WSJ said.

"Netflix ( NFLX ) is not aware of any ​investigation into our business outside of the standard merger review process," a spokesperson for the company said in an emailed statement to Reuters, adding that it was "constructively engaging" ⁠with the DOJ as part of a standard review ‍of the ​proposed deal.

Steven Sunshine, a lawyer representing Netflix ( NFLX ), said the company believes the department is conducting a standard review of its proposal.

"We have not been given any notice or seen any other ‍sign that the DOJ is conducting a separate monopolization investigation," Sunshine said.

The DOJ investigation is at an early stage, according to the WSJ report. 

The WSJ reported that the DOJ is also reviewing Paramount's proposed acquisition bid, which Warner Bros' board unanimously rejected by labeling it "inadequate" and "not in the best interests" of shareholders.

Paramount is pushing to conclude the DOJ's review of its tender offer within the next few weeks, ​Bloomberg News ‍reported late on Friday, citing sources familiar with the matter.

The company has been providing the information requested by the government, the report said, adding that once that process is completed, a ​10-day waiting period will begin for the DOJ to decide whether to challenge Paramount's proposal on competition grounds.

Paramount, Warner Bros and the Department of Justice did not immediately respond to Reuters requests for comment.

Netflix ( NFLX ) co-CEO Ted Sarandos was grilled by U.S. senators at a hearing on Tuesday over how the potential deal would affect competition across the entertainment industry.

The bid could also face investigation in the UK and the European Union.

More than a dozen British politicians and ​former policymakers called on the country's competition watchdog to launch a full review, while the EU's antitrust regulators are expected to scrutinize rival bids by Netflix ( NFLX ) and Paramount Skydance ( PSKY ) at the same time, Bloomberg News reported last month.

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