Lawmakers ask Department of Justice to investigate Warner Bros. Discovery merger
Four Democratic lawmakers have written to the Department of Justice to investigate Warner Bros. Discovery and launch an inquiry into alleged anti-competitive behavior. Democratic representatives Elizabeth Warren, Pramila Jayapal, David Cicilline and Joaquin Castro wrote that the merged company has harmed workers and reduced consumer choice. Warner Bros. Discovery was formed after WarnerMedia merged with Discovery Inc. in April 2022.
“We respectfully urge the Justice Department to investigate the state of competition in affected labor and consumer markets following consummation of this merger, which appears to have enabled Warner Bros. Discovery (WBD) to adopt potentially anticompetitive practices that reduce consumer choice and harm workers in affected labor markets,” the lawmakers wrote in the letter.
Warner Bros. Discovery did not respond to TechCrunch’s request for comment.
The lawmakers argue that Warner Bros. Discovery’s new ownership is “hollowing out an iconic American studio.” The letter outlines that many projects were cancelled by Warner Bros. Discovery not long after the merger, including “Batgirl,” which was canceled even though filming for the movie had already been completed. The letter also refers to the cancellation of popular shows like “Gordita Chronicles” and “The Time Traveler’s Wife.”
In addition, the lawmakers note that Primetime Emmy Award winner J. J. Abrams is now shopping elsewhere for a home for his TV show “Demimonde” which was initially picked up by HBO and then canceled before production began on the project.
The letter notes that consumers will likely never be able to watch shows purchased then cancelled by the company, and that Warner Bros. Discovery’s conduct amounts to a “catch and kill” practice that limits consumer choice.
The lawmakers also outline that the company’s actions are leaving workers with fewer choices for employment and advancement.
“Shortly after the merger was finalized, WBD began realizing a number of cost synergies that were used to justify the merger in the first place—including cuts to hundreds of jobs for working people,” the letter reads. “First, WBD cut the streaming platform CNN+. The CNN+ cut affected about 350 employees, and four months later, CNN laid off an additional 400 employees. WBD also enacted 100 layoffs in its company’s ad sales department as another cost-cutting effort related to the merger. In total, the aforementioned cuts affected thousands of people. Notably, WBD still has $3.5 billion in planned cuts—which does not bode well for workers.”
The letter ends by asking the Department of Justice to take another look at the transaction and take into consideration the actions that the company has taken since the merger was finalized a year ago. The lawmakers write that they hope the guidelines for the merger are updated to ensure they reflect the needs of workers, consumers and content creators in the media and entertainment industry.
The letter comes as Warner Bros. Discovery is expected to hold a press event sometime this week regarding its new direct-to-consumer streaming plan.
Lawmakers ask Department of Justice to investigate Warner Bros. Discovery merger by Aisha Malik originally published on TechCrunch