Should Netflix Be Allowed to Buy Warner Bros? Why This Merger Is Making Antitrust Lawyers Nervous

When two streaming giants want to become one, who decides what's good for competition?

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Here's a scenario that should be straightforward: two major competitors want to merge. The law says deals like this 'raise a presumption of illegality'. Regulators are supposed to challenge them. Case closed, right?

Not quite. Warner Bros Discovery is currently fielding serious bids from both Netflix and Paramount, and the question on everyone's mind isn't whether these deals would violate antitrust law – it's whether regulators will actually enforce it.

Let's talk about why this matters, and why the answer isn't as simple as it should be.

The Legal Standard Is Crystal Clear

The Clayton Act of 1914 prohibits acquisitions that 'may substantially lessen competition'. Modern competition guidelines have refined this over the decades, providing clear thresholds and markers for when deals cross the line.

Netflix buying Warner Bros Discovery? That's a horizontal merger between the leading streaming platform and one of its few major rivals. They compete for the same shows, the same talent, the same subscribers.

Paramount buying Warner Bros Discovery? Same problem, different flavour. You're combining two major film studios and two streaming platforms. That's concentration at both ends of the market.

Professor Eleanor Fox at NYU School of Law puts it bluntly: 'This is not a marginal case requiring novel economic analysis. It is a horizontal merger between significant rivals – the very scenario that has triggered enforcement for decades.'

So why are we even having this conversation?

Because Business Reality Is Messy

Here's where it gets complicated. Warner Bros Discovery is drowning in debt from previous mergers (some of which, critics argue, should have been blocked in the first place). The company arguably needs to sell. Netflix has the cash and the global reach to make it work. Paramount... well, Paramount has its own challenges.

Some commentators have suggested regulators should pick the 'less bad' option, or consider which buyer would be better for content creators, or think about international competitiveness against companies like Disney.

Herbert Hovenkamp, one of America's leading antitrust scholars, has strong feelings about this approach: 'The moment enforcers begin picking winners based on preference rather than statute, the entire framework loses legitimacy. Businesses need to know the rules ex ante, not discover them through political calculation.'

But is he right? Or is this one of those moments where strict adherence to rules produces worse outcomes than a bit of regulatory flexibility?

What We Lose When Competitors Merge

Let's ground this in something concrete. Right now, if you're a showrunner with the next Game of Thrones or Stranger Things, you can pit Netflix, HBO (Warner Bros Discovery), Paramount+, Disney+, Apple TV+ and Amazon against each other. That competition drives up what you get paid and gives you creative leverage.

Combine Netflix and Warner Bros Discovery, and you've just lost one of the biggest bidders at the table. The remaining platforms have less pressure to compete aggressively for your project.

Matthew Stoller, Director of Research at the American Economic Liberties Project, frames it this way: 'Media concentration doesn't just harm consumers through higher prices. It flattens culture, reduces the number of gatekeepers willing to take creative risks, and narrows the stories that get told.'

Is that a price worth paying for 'saving' Warner Bros Discovery from its debt problems?

The Integrity Question That Nobody Wants to Answer

Here's what keeps legal scholars up at night: if regulators let one of these deals through, what's the principle?

Is it 'we'll allow illegal mergers if the company is struggling financially'? That's a terrible precedent. Every company would suddenly discover it's struggling.

Is it 'we'll choose the buyer we like better'? That turns antitrust enforcement into a popularity contest and destroys any pretense of rule of law.

Is it 'streaming is different, so old rules don't apply'? Good luck explaining that to the next industry that wants an exemption.

Professor Tim Wu of Columbia Law School has argued for years that 'the integrity of antitrust enforcement depends not on perfect outcomes, but on consistent process'. Once you start making exceptions – even for sympathetic reasons – the whole system begins to unravel.

But What If the Rules Are Wrong?

There's another argument lurking here that deserves attention: maybe the problem isn't inconsistent enforcement, but overly rigid rules.

Perhaps Warner Bros Discovery's financial struggles are proof that the streaming market is actually more competitive than traditional antitrust analysis suggests. Maybe global competition from international platforms changes the equation. Maybe the traditional focus on horizontal mergers misses the real competitive dynamics in digital media.

If that's true, the answer isn't to bend the rules for this deal – it's to change the rules properly, through legislation or updated guidelines that everyone can see and rely on.

But that's not what's being proposed here. What's being proposed is regulatory discretion to make exceptions when it seems convenient.

So What Should Happen?

The strict legal answer is straightforward: both deals should be blocked. If Warner Bros Discovery needs to sell, it should find a buyer that doesn't directly compete in streaming and film production. That's not a punishment – it's just how competition law works.

The pragmatic answer is messier: maybe one of these deals is marginally less harmful than the other, and regulators should focus their limited resources on blocking the worse one whilst letting the other proceed with conditions.

The cynical answer: whichever deal has better political connections will probably go through, and we'll get a lengthy economic analysis justifying why this particular horizontal merger between major competitors doesn't actually lessen competition.

Where Legal Integrity Project Stands

This is one of those cases where reasonable people can genuinely disagree. We've laid out the competing arguments because they deserve serious consideration. But after weighing them, our position is clear: both deals should be blocked.

Here's why.

The integrity of a legal system doesn't come from getting every outcome perfect – it comes from applying rules consistently. When the law says horizontal mergers between major competitors 'raise a presumption of illegality', that presumption has to mean something. It can't simply be the opening position in a negotiation that politically connected companies can work around.

Yes, Warner Bros Discovery is struggling financially. Yes, finding a non-competing buyer will be harder. But 'we need the money' has never been a defence to violating competition law, and it can't become one now. If we establish the precedent that struggling companies can merge with their direct competitors, we've effectively written an exception that swallows the rule.

The argument for regulatory flexibility sounds pragmatic, but it misunderstands what businesses actually need from the law. Companies don't need regulators to be flexible – they need regulators to be predictable. They need to know what the rules are before they make multi-billion pound investments, not discover them through political calculation after the fact.

Should the rules change? Perhaps. If streaming really is so different that traditional horizontal merger analysis doesn't work, then Congress should update the Clayton Act or regulators should revise their guidelines through proper public process. What shouldn't happen is ad hoc exceptions granted behind closed doors based on sympathetic circumstances.

Warner Bros Discovery has options. It can find a buyer from outside the streaming and film production markets. It can pursue a different corporate structure. It can continue operating independently. What it cannot do – what it should not be allowed to do – is eliminate a major competitor simply because that's the most convenient solution to its financial problems.

The cost of bending the rules here goes far beyond this one deal. Every future merger will cite this precedent. Every struggling company will suddenly discover it needs to merge with a competitor. And businesses trying to plan for the future will have no idea what the law actually requires, because enforcement will depend on political winds and regulatory mood rather than clear statutory standards.

Legal integrity isn't just an abstract principle. It's the foundation that allows markets to function, businesses to plan, and competition to thrive. Once you sacrifice it for short-term pragmatism, getting it back is nearly impossible.

The law is clear. It should be enforced clearly. Both deals should be blocked.