Labor Union Coalition Calls on FTC to Reject Amazon-MGM Deal

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The Strategic Organizing Center (SOC), a group representing
nearly 4 million workers, is asking the Federal Trade Commission to reject
Amazon’s acquisition of MGM.

Amazon and MGM announced that they had entered into a definitive merger agreement in May. Amazon would pay $8.45 billion in the deal, if approved. Amazon began showing interest in the company and its catalog of over 4,000 films and 17,000 TV shows earlier in the year.

Concerns of antitrust issues were immediately raised, with The Wall Street Journal citing sources saying that the FTC had asked to review the potential deal.

Variety reported Wednesday morning that the SOC sent a 12 page letter to the FTC, voicing concerns with the acquisition that would give Amazon too much power in the entertainment industry.

“Amazon has a well-documented history of leveraging its
dominance in e-commerce to gain market share in vertically-adjacent markets using
a range of unfair and anticompetitive practices. Amazon’s current practices in
SVOD and related markets – including leveraging e-commerce power to build SVOD
market share, offering Prime Video at below market prices, and exclusionary use
of its dominance in the streaming device and cloud computing markets – already
raise serious questions of anti-competitive conduct in the specific market that
would be affected by the merger,” the letter says.

In its letter, the SOC offered suggestions for conditions that the FTC should place on the merger, if approved. The proposed conditions include requiring Amazon to:

1) unbundle Prime Video and delivery and price Prime Video
at a market rate

2) provide competitors neutral access to its Fire TV Stick
device and cloud computing services

3) limit the imposition of all-rights contracts on content
makers

4) share viewership data with content makers with which it
contracts

However, SOC executive director Michael Zucker concluded the letter by saying that “the best course would be to prevent Amazon from gaining an additional foothold in the SVOD market from which to expand its power over this important area of economic and cultural significance for our country.”

Along with investigating the MGM deal, the FTC is investigating
Amazon’s wider business practices.

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