The Antitrust Concerns Around Warner Bros. Offers

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00:00A proposed deal of this scale and size and value is inevitably going to be looked at by regulators

00:07and reviewed in part because we have a set of codified guidelines and rules from 2023 that

00:15allow for that to be the case. When regulators do look at it, Jennifer, what is the top consideration

00:21about this market that they'll be making? Thank you so much for having me. And you're right,

00:26one of the things we're going to see in this conversation is how do these 2023 guidelines

00:31potentially play out in this case? And what does that mean if such ends up in court, as well as

00:37what does that mean for any challenges? One of the interesting things is going to really be around

00:42this question of market definition. What is the market that these two platforms are potentially

00:47competing in? And what does that mean for the actual average consumer? Is this online streaming

00:54subscription services? Is this some kind of bigger attention economy issue? Or is this something,

01:00you know, specific about the amount of time individuals spend on any type of entertainment

01:05as it goes about? Jennifer, will any of the regulators involved look at what the benefit

01:14is to the consumer in either merger or deal going through? I mean, we can certainly hope so.

01:21U.S. antitrust law is supposed to be based in the consumer welfare standard, which means what

01:26regulators should really be looking at is will this merger or acquisition harm consumers in some way?

01:32Will it negatively impact prices? Will it negatively impact the ability to have a certain quality or

01:40certain other elements that really should be based on sound economic factors? This shouldn't be about a

01:47subjective idea of how many players should be in the streaming market. It should really be focused

01:52on this question of are consumers going to be harmed? Are consumers going to be worse off if they

01:58have this combined company as opposed to two separate companies?

02:03The Cato Institute is so interesting because it's a libertarian think tank and it's really thinking about

02:07individual liberty, about limited government, free markets. You come at it from that angle. But Jennifer,

02:11give us your global perspective here a bit, because this doesn't just get signed off from the United

02:16States. We go worldwide. We're just seeing what the EU is doing again today, for example, with

02:21alphabet and competition within AI. Are they going to hit roadblocks there as well?

02:26I mean, that's certainly going to be a question depending on the nature of any particular transaction.

02:31And we've seen this happen in other cases when it comes to questions around large U.S. tech

02:37companies and their potential acquisitions. For example, we certainly saw a large debate around

02:42the Microsoft Activision acquisition in Europe as well. And ultimately, that was able to go through.

02:48We've also seen European regulators trying to put up various structural roadblocks that would allow

02:53some of America's leading tech companies to continue to innovate, to continue to go into new markets.

02:58So I think it's certainly a worthy question of not only how might such transactions play out when it

03:04comes to U.S. regulators, but if this is something that's a global international debate, are there

03:10other regulators where there might be other conversations that get had along the way?

03:14It's interesting, Jennifer, that Netflix has tried to front run a lot of these concerns by putting

03:19out the statement that consumers will win from their perspective, because already they're signed up

03:23to Netflix and HBO. And more broadly, they'll probably get more bang for the buck. But they're also

03:28having to talk about how they're going to benefit content creation, or indeed, the industry of Hollywood

03:33writ large. Should they have to do that? Will the narrative be based on that in any way as to how

03:40this might help jobs and creativity?

03:42I think one of the big questions is going to be around that market definition. Is the market the

03:47definition definition include markets for content creation? And if so, what does that mean in our in

03:53this day and age where we have such significant amounts of user generated content? Is it only about

03:59studio created content or is it also about looking at content more holistically, the way short form video

04:04or even long form video on platforms like YouTube have arisen to allow creatives new outlets? So we'll

04:12certainly see that be part of the conversation as well, possibly if that gets included in the market

04:17definition.

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