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The FTC is reportedly poised to probe Amazon’s MGM acquisition

The FTC is reportedly poised to probe Amazon’s MGM acquisition


The review follows Amazon’s recent MGM deal

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Amazon & MGM
In this illustration photo Amazon logo is displayed on a smartphone screen with MGM.
Photo by Muhammed Selim Korkutata/Anadolu Agency via Getty Images

Following Amazon’s recent acquisition of MGM, the deal will reportedly be reviewed by the Federal Trade Commission — meaning Lina Khan, a long-outspoken critic of Amazon who recently became FTC chair, will have oversight over the deal. The proceedings could signal how she’ll handle antitrust cases against Amazon in the future.

Citing people familiar with the situation, The Wall Street Journal reported Tuesday that the FTC requested oversight of the deal during negotiations between agencies specifically because it is currently overseeing the ongoing antitrust probe. According to the WSJ, the Justice Department and FTC have divvied up antitrust investigations of the tech giants — Apple, Google, and Facebook are also the subject of the probes — but the FTC pushed for jurisdiction over Amazon-MGM.

Either way, the deal would have likely received scrutiny. Large acquisitions and mergers that may or may not lead to antitrust issues are typically reviewed as a standard practice. 

Sworn in as chair last week, Khan said in a statement at the time that she looked “forward to working with my colleagues to protect the public from corporate abuse.”

Amazon acquired MGM last month in a merger that will benefit its Prime Video streaming service

A spokesperson for the FTC declined to comment on the report. Amazon did not immediately return repeated requests for comment prior to publication.

Amazon acquired MGM in May in a deal valued at nearly $9 billion. The acquisition saw Amazon scoop up tens of thousands of hours of entertainment, most notably including much of the James Bond IP. At the time, Mike Hopkins, senior vice president of Prime Video and Amazon Studios, said in a statement that the “value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team.”

Amazon does not charge an additional or separate fee for its streaming service. Like two-day shipping, free grocery delivery, and Amazon Music, Amazon’s marquee streaming service is offered as part of the overall experience. It does, however, lack the sheen of rivals like Disney+ and Netflix, and its originals haven’t quite resonated in the same way that WandaVision or Stranger Things have. 

While the true value of the acquisition is still unclear, the deal saw Amazon win IP that it desperately needed. Amazon may not need subscribers to pay for Prime Video, but it does arguably need them to care about it to help continue making Prime memberships a competitive bundle of subscription-specific offers and services.