Will the Amazon-MGM Acquisition Be Approved... A Test of Big Tech Regulation

[Asia Economy Reporter Yujin Cho] Bloomberg reported on the 27th (local time) that whether Amazon, the world's largest e-commerce company, succeeds in acquiring Hollywood major film studio MGM will become the first test of the Biden administration's big tech regulations.

The report stated that Amazon's attempt to acquire MGM is sparking new criticism of the U.S. government's regulatory moves against big tech companies. This acquisition attempt is an extension of big tech companies building monopolistic influence across the digital economy through mergers and acquisitions, but the hands and feet of competition authorities trying to control this are tied by the limitations of the current legal system.

Foreign media analyzed that the possibility of a halt to approval is low, given that the Deputy Attorney General, who will decide on the approval of this acquisition, is still vacant. This acquisition will undergo corporate merger reviews by the competition authorities, the Department of Justice (DOJ) and the Federal Trade Commission (FTC). The regulators will investigate whether this acquisition hinders market competition or harms consumer interests based on current antitrust laws, and then decide whether to approve the acquisition.

Professor Sam Weinstein of Cardozo Law School in New York said, "Under current law, there will be little difficulty in completing a merger between two companies with different business areas," pointing out that the antitrust legal system created in the 1890s has limitations in preventing new monopolistic behaviors of big tech companies like Amazon. This is because it is not easy to reverse the market monopoly status that platform operators like Amazon have expanded in an octopus-like manner.

On this day, Massachusetts and Pennsylvania also launched antitrust investigations into Amazon, further tightening the antitrust encirclement around Amazon. In addition to competition authorities such as the DOJ and FTC, the state governments of Washington, California, and New York are also conducting antitrust investigations into Amazon.

Photo by Bloomberg

Concerns about this acquisition have also been expressed in the political sphere. David Cicilline, chairman of the Antitrust Subcommittee of the U.S. House Judiciary Committee, known as an Amazon critic, tweeted on the day, criticizing, "(This acquisition) expands and solidifies Amazon's monopoly power."

Amy Klobuchar, Democratic Senator who proposed the antitrust prohibition bill to Congress in February, also stated, "(This acquisition) is an issue that could affect millions of consumers and must be thoroughly investigated by the DOJ."

The American Economic Freedom Project, a U.S. antitrust organization, argued, "Congress must swiftly respond by passing bipartisan legislation that prohibits large mergers and acquisitions attempts by big tech companies."

Amazon's announcement of the MGM acquisition came two days after the Washington DC prosecutor filed a lawsuit against Amazon in the Washington DC court for violating antitrust laws.

Washington DC Attorney General Karl Racine claimed, "Amazon has clauses that prohibit retailers selling goods on its platform from selling at lower prices on other platforms, which hinders market competition and artificially raises prices, harming consumer interests."

The significance of this lawsuit is not light, given that Attorney General Racine, who is leading this lawsuit, is a person President Biden is considering nominating as FTC chairman. Attorney General Racine suggested the possibility that other states or the federal government may join Amazon's antitrust lawsuit in the future.

This content was produced with the assistance of AI translation services.