Elizabeth Warren Urges DOJ to Scrutinize Disney-Fubo Deal Over Antitrust Concerns

Senator Elizabeth Warren has called on the Department of Justice (DOJ) to closely examine Disney’s acquisition of a controlling stake in Fubo, citing potential antitrust issues. Per Variety, Warren argued that the deal could significantly increase Disney’s market power and ultimately lead to higher costs for consumers.

Disney announced in January that it would merge its Hulu + Live TV service with Fubo, taking a 70% ownership stake in the combined entity. This development came shortly after Disney, Fox, and Warner Bros. Discovery abandoned their plans to launch Venu Sports, a joint sports streaming service. According to Variety, Warren expressed concerns in her letter to the DOJ’s Antitrust Division, stating that Disney’s move enables it to “gobble up a competitor” and solidify its dominance in the streaming market.

“This proposed acquisition raises significant concerns under antitrust law, would give Disney increased market power and incentives to increase costs for viewers, and should be regarded as another data point in Disney’s history of anticompetitive behavior,” Warren wrote in her letter.

Warren has previously voiced concerns about market consolidation in the streaming industry. Last summer, she, alongside Sen. Bernie Sanders and Rep. Joaquin Castro, warned against the potential dominance of Venu Sports in live sports streaming. Per Variety, Fubo took legal action against Disney, Fox, and Warner Bros. Discovery last year, alleging that the media giants were leveraging their influence to stifle competition and potentially drive Fubo out of business. In May, Fubo joined DirecTV and DISH Networks in urging Congress to hold hearings on the issue.

A federal judge granted an injunction in August to block Venu Sports from launching. Disney, Fox, and Warner Bros. Discovery subsequently appealed the decision. The Biden administration’s DOJ supported the injunction in a legal brief, while some Republican lawmakers opposed it, arguing that Venu would increase competition in the market. However, the litigation was ultimately dropped as part of the Disney-Fubo agreement.

Related: Sen. Elizabeth Warren Calls for DOJ Scrutiny of Disney-Fubo Deal Over Antitrust Concerns

Warren contended in her letter that Disney’s acquisition of Fubo serves as a way to bypass antitrust laws by eliminating a direct competitor. “Disney is already one of the most powerful media companies in the world,” she wrote. “Threatened by Fubo’s lawsuit and in an apparent attempt to keep Fubo from ‘becoming the next Netflix,’ Disney has proposed a plan to acquire its competitor, and, in the process, become an even more powerful force in an already highly-concentrated market.”

Despite the merger, Fubo and Hulu + Live TV are expected to continue as separate offerings, albeit under one corporate structure. Additionally, Disney plans to launch a standalone ESPN streaming service later this year. As reported by Variety, Disney CEO Bob Iger recently suggested that the rise of multiple “skinny bundles” rendered the Venu Sports project unnecessary.

Warren’s letter was addressed to Omeed Assefi, the interim head of the DOJ Antitrust Division, and copied to Gail Slater, a nominee for the position who previously served as a senior vice president at Fox Corp. and was registered as an in-house lobbyist at Roku. In her appeal to the DOJ, Warren referenced the previous administration’s resistance to Disney’s plans for Venu and urged officials to continue monitoring consolidation in the industry.

“I urge DOJ to continue this work on behalf of viewers by closely scrutinizing this proposed deal and blocking it if it violates antitrust law,” Warren stated.

Source: AOL