Reuters and Bloomberg reported on the 9th that a consumer using “HBO Max” submitted a class action proposal against Netflix in federal court in Northern California.
The plaintiff argued that the transaction between Netflix and Warner Bros. could greatly undermine the competitive structure of the U.S. subscription video streaming market.
He pointed out that Netflix has “repeatedly shown willingness to raise subscription fees even in the face of competition before,” and stressed that the merger will “significantly increase the concentration in an already rigid and oligopolized market.”
In particular, it was raised that control over core content such as Warner Bros.’ Harry Potter series, DC Comics movies, and drama Game of Thrones could be transferred to Netflix, and HBO Max, one of the major competitive platforms, could virtually disappear from the market.
The lawsuit is based on the U.S. Clayton Act, which prohibits business combinations that hinder competition and gives individuals the power to file lawsuits. The plaintiffs have asked the court to issue a restraining order to suspend the merger.
The law firm representing the lawsuit has a history of conducting several anti-trust lawsuits against major entertainment and financial companies in the past, Reuters said.
Netflix signed a final contract with Warner Bros.’ film and TV studios on Wednesday to acquire the U.S. streaming market, which includes HBO Max, for 72 billion dollars. If the two companies are combined, the U.S. streaming market is estimated to take up more than 30 percent of the market. However, the merger needs to be approved by the U.S. federal government.
JENNIFER KIM
US ASIA JOURNAL
