Amazon to Face FTC Probe Over MGM Acquisition: Reports

Isabella James, Tech Times 09 July 2021, 11:07 pm

Amazon is reportedly about to face a probe by the Federal Trade Commission (FTC) over its acquisition of TV and movie studio Metro-Goldwyn-Mayer (MGM).

The tech giant announced the purchase in May for the sum of $8.45 billion.

According to Gizmodo, the FTC is "wary of whether the deal will illegally boost Amazon's ability to offer a wide array of goods and services, and is not just limited to content production and distribution."

Amazon Probe by FTC: What You Should Know

(Photo : GettlyImages/ Stefano Guidi )
Amazon logo

Amazon and MGM announced the tech company's acquisition of the TV and movie studio back in May. Due to the acquisition, Amazon now owns MGM's library content, which includes 4,000 films and 17,000 hours of TV programming, according to The Verge.

MGM is best known for two film franchises, "James Bond" and "Rocky," as well as TV programs such as "The Voice" and "The Handmaid's Tale."

Amazon has said that the acquisition will give viewers greater access to the films and TV shows done by MGM. The company said it also sees the acquisition as an encouragement for the Hollywood studios to continue producing.

The FTC probe over this deal has been described by reports as in-depth and could last many months. The news of an FTC probe follows calls from Senator Elizabeth Warren asking the agency to look deeper into the acquisition made by Amazon.

According to Deadline, Senator Warren has asked the FTC to look into "whether this vertical acquisition is truly an entertainment strategy or merely another step towards unfettered monopolization."

FTC Chairwoman Lina Khan

Amazon Wants FTC Chair Khan Removed From Metro-Goldwyn-Mayer Acquisition Issue—Claiming She Is Bias

(Photo : Photo by SAUL LOEB/POOL/AFP via Getty Images)
Lina Khan, nominee for Commissioner of the Federal Trade Commission (FTC), testifies during a Senate Committee on Commerce, Science, and Transportation confirmation hearing on Capitol Hill in Washington, DC, April 21, 2021. (Photo by SAUL LOEB / POOL / AFP)

The FTC is now led by a new chairwoman, Lina Khan, who is a known Amazon critic and antitrust advocate. She once wrote an article titled "Amazon's Antitrust Paradox" in 2017 for the Yale Yellow Journal, per a separate report by The Verge.

Amazon has since filed a petition requesting that Khan be removed from the MGM acquisition issue. The tech giant argued that the FTC chair is biased.

Amazon's Other Antitrust Issues

Amazon's purchase of MGM is the latest addition to the list of the company's acquisitions that has been scrutinized and investigated by the government. It is also not the first time that Amazon had to encounter the FTC.

In 2017, the FTC approved the company's acquisition of Whole Foods despite antitrust concerns voiced by critics.

Last year, Amazon was asked to participate in an antitrust hearing conducted by the United States House Judiciary Antitrust Subcommittee. The hearing investigated the digital market and also called for the participation of Apple, Google, and Facebook.

Amazon has also previously faced an antitrust probe by the European Commission over its e-book business. Italy and Spain have separately investigated the tech company over other antitrust issues.

Also Read: Amazon, Apple, Google, and Facebook: Congress Finds Tech Giants Abuse 'Monopoly Power'-Will Antitrust Law Break them Up?

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Written by Isabella James