Netflix Under Investigation by DOJ Over Warner Bros Merger and Industry Leverage

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The competition to buy Warner Bros. Discovery has intensified, turning into a legal battle between Netflix and Paramount. With only one day left for the Warner Bros. Discovery board to consider a final offer from Paramount, backed by David Ellison, the Department of Justice has officially begun an investigation.

Federal regulators are looking into whether a merger between Netflix and Warner Bros. Discovery would violate antitrust laws and create a media monopoly. This follows weeks of increasing tension and a recent change in leadership at the DOJ’s Antitrust Division, with Omeed Assefi now leading the investigation.

The DOJ is requesting documents and testimony from key industry figures, presenting a major challenge for Netflix, which is trying to buy Warner Bros. Discovery for around $83 billion. One experienced producer described the situation as extremely serious, adding that a deal of this size was always likely to attract government attention.

The timing of the Justice Department’s investigation is delicate, as Warner Bros. Discovery shareholders are set to vote on the proposed merger on March 20th. Those who received requests from the DOJ have until March 23rd to respond – just after the crucial shareholder vote.

Paramount has already stated it will fight the deal in court, claiming it would significantly reduce competition in the streaming market. However, Netflix co-CEO Ted Sarandos recently downplayed the concerns while at a public event.

Sarandos challenged competitors to simply offer a more appealing deal, suggesting that Netflix isn’t a monopoly. Netflix’s lawyers agree, arguing that the company’s success comes from investing in new ideas and providing value to customers, not from unfair practices.

Even though Netflix’s lawyers publicly stated they hadn’t received any notification about a monopoly investigation, the Department of Justice has now contacted filmmakers throughout Hollywood.

The investigation seems to be picking up speed after a tough Senate hearing earlier this month, where Netflix’s Ted Sarandos was grilled by senators about the potential cultural and financial effects of a large-scale merger in the entertainment industry.

The already complex situation surrounding Warner Bros. Discovery is further complicated by the White House’s changing position. President Trump has said he shouldn’t interfere with the future of WBD and its properties like CNN, but he has met with both the Ellison family and Ted Sarandos several times.

This political element has transformed what was a simple business deal into a larger discussion about media power and government regulation in today’s fast-moving digital world. Despite the turmoil, Ted Sarandos continues to be a key player in entertainment, recently appearing at several major international awards shows.

Under Sarandos’ leadership, Netflix continues to grow its original programming, recently achieving significant success with the thriller Society of the Snow and the newest season of Bridgerton. He has also been vital in establishing long-term collaborations with creators like Greta Gerwig, who will be adapting The Chronicles of Narnia.

Warner Bros. Discovery, under the leadership of David Zaslav, has a strong lineup of upcoming movies and shows, making it an attractive asset for companies looking to buy. The studio is getting ready to release Supergirl: Woman of Tomorrow, featuring Milly Alcock, as part of James Gunn’s revamped DC Universe.

Fans are also excited for the next season of The Last of Us and the Game of Thrones prequel, A Knight of the Seven Kingdoms, both of which are expected to be key attractions for whichever streaming service ends up offering them. As a shareholder vote nears in March, the entertainment industry is preparing for a decision that could significantly change how content is made and delivered.

If a deal with Netflix goes through, it would create a massive streaming service with over 450 million subscribers. However, the Department of Justice is now investigating whether the combination could create a monopoly, making the final outcome less certain.

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2026-02-23 12:21