Senate Antitrust Republicans Grill Netflix CEO Over Content, Job Cuts in WBD Deal
Senate Antitrust Subcommittee Republicans expressed concerns during a hearing Tuesday about the competitive effects of a Netflix/Warner Bros. Discovery merger and grilled Netflix co-CEO Ted Sarandos about promoting diversity and sexualized content on the streaming service. “It seems as though you have engaged in creating not only a monopoly of content, potentially, but the wokest content in the history of the world,” said Sen. Eric Schmitt, R-Mo.
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Senators from both parties also asked questions about possible job losses and higher prices resulting from the deal. But several Democrats said they had similar concerns about WBD being purchased by Paramount Skydance, which has been pushing its rival bid (see 2601220054). Ranking member Cory Booker, D-N.J., said Paramount Skydance CEO David Ellison declined to attend the hearing.
Senate Antitrust Chairman Mike Lee, R-Utah, said Netflix purchasing WBD would raise vertical and horizontal antitrust concerns and give the combined company monopoly power over content and entertainment. “One might say Netflix seeks to become the one platform to rule them all,” said Lee, referencing the WBD-owned Lord of the Rings franchise. He said Netflix competes with both HBO’s streaming service and WBD’s movie production business, and the deal would incentivize Netflix to disadvantage competitors.
Sarandos and WBD Chief Revenue and Strategy Officer Bruce Campbell said WBD’s facilities were very different from Netflix’s. Sarandos said the streaming services are “complementary” because most HBO Max subscribers also subscribe to Netflix, while the companies' movie and TV studios are distinct. They won’t have “a Noah’s ark problem” where the combined company has “two of everything,” Sarandos said. He pointed to YouTube as a more apt competitor for Netflix, an argument that Lee repeatedly disputed. “They're not in the same business. They're not producing the same thing,” Lee said.
“Should the American people be concerned about a monopoly in entertainment and streaming?” asked Senate Commerce Committee Chairman Ted Cruz, R-Texas.
Numerous Republican senators questioned Netflix’s political views and characterized the streaming service as left-leaning propaganda. Sen. Josh Hawley, R-Mo., said almost half the children’s content on Netflix “promotes transgender ideology,” a figure that Sarandos disputed. “It offends me that Netflix is pushing this content at parents in what seems to be a very coordinated, thought-through, planned-out agenda,” Hawley said.
Schmitt also brought up pro-diversity statements that Netflix made in the wake of the 2020 death of George Floyd. “Your content’s oversexualized for kids. You're engaged in very woke programming,” he said. “Why in the world would we give a seal of approval or a thumbs-up to make you the largest behemoth on the planet related to content?”
Cruz went after WBD as well, asking Campbell about CNN’s coverage of the Trump administration.
Sarandos said Netflix doesn’t have a political agenda, and the company seeks to offer a wide variety of content. “We have state-of-the-art tools for parents to manage what their kids see on Netflix.” Sarandos said Netflix would fail if it were pushing propaganda.
In addition, senators from both parties pressed Sarandos about Netflix’s plans for producing domestic films, compensating movie production workers and releasing films in theaters. Sens. Adam Schiff, D-Calif., Amy Klobuchar, D-Minn., and others asked questions about possible job losses or production reductions stemming from the deal. Sarandos committed to Hawley that Netflix would increase film production in the U.S. and preserve a 45-day release window for movie theaters.
Pushed by Hawley to commit to not reducing residual payments to production staff, Sarandos said the matter was complicated and not a yes-or-no question. “That’s a complicated, long no,” Hawley said.
Several Democrats said they were worried that the review of the merger wouldn’t be neutral. Booker condemned President Donald Trump’s purchase of stock in companies involved in the deal while it was awaiting antitrust review. He also pushed the executives about their interactions with Trump and on whether they had made promises to the administration. Campbell said their conversations with the president hadn't involved any offers or promises.
“I worry about the context in which this merger is going to be evaluated by actors I do not think are independent, and they brandish their corruption with bravado,” Booker said. Klobuchar likewise argued that the “major mega-merger” needs “a thorough antitrust review.”
In a letter to the committee, Free Press, the Communications Workers of America, Public Knowledge, the National Hispanic Media Coalition and other groups urged Congress to make sure the merger review process is transparent and legal. “Any scrutiny of this proposed merger that federal agencies conduct must not undermine First Amendment freedoms,” said Free Press co-CEO Jessica Gonzalez in a release.
NetChoice, meanwhile, wrote the committee in support of the deal. “By merging Netflix’s technological prowess with the iconic creative depth of Warner Bros., this is a pro-innovation partnership that effectively lowers the cost and expands the accessibility of quality entertainment,” said Patrick Hedger, the group's policy director, in a release.