Amazon buys top Hollywood studios MGM for $8.45billion
Amazon on Thursday said that it closed its acquisition of MGM, in an $8.45 billion deal that will allow the e-commerce giant to expand its TV and movie offerings.
The deal underscores the limits of the mounting antitrust scrutiny of tech giants in Washington, with the closure happening after anti-monopoly groups and their allies pressed Federal Trade Commission Chair Lina Khan to block the deal to slow Amazon’s growth.
The FTC signaled it would take a tougher line on tech acquisitions under Khan’s leadership, but it is mired in a 2-2 partisan deadlock that has prevented key agenda items from moving forward.
Amazon’s announcement came after a regulatory waiting period expired. (Amazon founder Jeff Bezos owns The Washington Post.)
“MGM has a nearly century-long legacy of producing exceptional entertainment, and we share their commitment to delivering a broad slate of original films and television shows to a global audience,” said Mike Hopkins, senior vice president of Prime Video and Amazon Studios.
European regulators approved the deal this week, saying that its investigation found the move “would not significantly reduce competition” in relevant video markets.
FTC spokeswoman Betsy Lordan declined to comment on the deal and any communications to Amazon or MGM.
MGM’s decades-old library of hits, including “Rocky” and “Legally Blonde,” will help bolster Amazon’s video catalogue, which faces fierce competition from other streaming services as well as traditional movie studios.
Amazon has produced several TV and movie hits and distributed them on its Prime Video service, but it has a slew of shows that have been met with so-so reception.
New streaming competitors enter the market every year, and Amazon has to contend with the established success of services such as Netflix and HBO Max.
By coming together, MGM will get the advantage of Amazon’s digital savvy, and Amazon will have a wealth of titles to draw from, plus the talent of a movie studio known for producing crowd-pleasing films.
The FTC has been navigating a surge in merger filings, and last year it said in a blog post that the law allows the agency to determine a merger is illegal even after the companies have merged. When it is unable to investigate deals by the regulatory deadline, the agency has sent letters to some companies warning them that the agency may later determine the deal was unlawful and that they’re proceeding with deals “at their own risk.”
Amazon’s acquisition of MGM comes amid mounting antitrust scrutiny of tech giants. The FTC has an antitrust suit against Facebook, and the Justice Department has a lawsuit against Google. The D.C. attorney general brought an antitrust suit against Amazon last year, alleging that it is fixing prices through contract provisions with third-party sellers.
On Capitol Hill, lawmakers have also advanced legislation that takes aim at the core business models of Amazon and other major tech companies, including a bill that would bar companies from boosting their own products over rivals.