Civil subpoena reveals DOJ concerns about exclusionary conduct that could entrench streaming giant’s market power amid broader antitrust review of streaming consolidation
The U.S. Department of Justice is investigating whether Netflix has engaged in anti-competitive tactics. The streaming giant faces regulatory scrutiny as part of its proposed acquisition of Warner Bros. Discovery’s studios and streaming service, according to a civil subpoena reviewed by the Wall Street Journal. The investigation represents a critical moment for Netflix’s expansion ambitions and raises fundamental questions about market concentration in the streaming industry.
The DOJ’s civil subpoena, directed at another entertainment company, asked for detailed information about Netflix’s conduct. Specifically, the department requested that the company “describe any other exclusionary conduct on the part of Netflix that would reasonably appear capable of entrenching market or monopoly power.” The language reflects serious antitrust concerns the DOJ is investigating whether Netflix has used its market position to exclude competitors and cement its dominance.
This inquiry goes beyond simply reviewing the proposed acquisition. The investigation targets Netflix’s broader business practices, examining whether the company has systematically used anti-competitive tactics to strengthen its market position. Exclusionary conduct actions designed to prevent competitors from competing effectively represents one of the most serious antitrust concerns regulators can pursue.
The Scope of Antitrust Concerns
The DOJ’s investigation reveals multiple layers of antitrust concern. The department is asking whether either the Netflix acquisition or the competing Paramount bid to acquire Warner Bros. Discovery might hurt competition in the streaming market. That dual-track investigation acknowledges that consolidation in streaming could harm consumers through reduced choice and potentially higher prices.
Beyond the acquisition itself, the DOJ is examining how past mergers of studios and distributors have affected competition for creative talent. This represents a sophisticated antitrust analysis recognizing that streaming consolidation doesn’t just affect consumer choice, but also impacts the labor market for creators, writers, directors, and actors. When companies consolidate, their power over talent contracts increases, potentially affecting compensation and creative freedom across the industry.
The department also sought information on how talent contracts vary between studios. This line of inquiry suggests the DOJ believes Netflix might be using its market power to control talent relationships in ways that harm competition. If Netflix can dictate unfavorable terms to creators because of its dominant market position, that represents another form of anti-competitive conduct.
The Investigation’s Significance
The investigation’s breadth indicates serious regulatory concern about Netflix’s market dominance. By asking about “exclusionary conduct” capable of “entrenching market or monopoly power,” the DOJ is using language that suggests potentially illegal antitrust violations. The company isn’t merely being asked about the proposed deal it’s being investigated for potentially unlawful business practices.
The DOJ’s simultaneous review of Paramount’s competing bid adds another dimension. By investigating both deals, the department is essentially acknowledging that further consolidation in streaming could harm competition. Whether Netflix or Paramount acquires Warner Bros. Discovery, the result would be fewer major streaming services and less competitive pressure in the market.
The Broader Streaming Wars Context
This investigation reflects growing regulatory skepticism about streaming industry consolidation. Since Netflix launched in 2007, the streaming landscape has become increasingly concentrated, with Netflix, Disney, Amazon, and a handful of other companies dominating the market. Independent competitors have largely disappeared or been absorbed into larger conglomerates.
The DOJ’s focus on talent contracts and exclusionary conduct suggests regulators understand that streaming competition involves more than just consumer choice. It encompasses how the industry treats creators, writers, and actors and whether dominant companies can use their market power to control entire creative ecosystems.
Next Steps and Implications
The investigation’s implications extend beyond Netflix. Any findings about anti-competitive conduct could set precedent for how antitrust regulators evaluate streaming and media consolidation going forward. The DOJ has signaled that simply offering streaming services at competitive prices isn’t sufficient regulators will examine whether companies are using exclusionary conduct to maintain dominance and prevent competition.
For Netflix, the investigation represents both a legal and strategic challenge. The company must respond to the DOJ’s demands for information while navigating regulatory uncertainty about its acquisition plans. The outcome will likely shape not just Netflix’s future, but the competitive landscape of the entire streaming industry.
