Netflix Quietly a Huge Winner in Biden's Order Targeting Big Business
Netflix should welcome -- even celebrate -- the White House's efforts to promote competition. Why? Look closely. From a report: As just about everyone knows, the suits in Washington D.C. have it out for Big Tech these days. Listen to the cocktail conversations about antitrust reform. Or watch the marches into courtrooms where the main objective is to break 'em up. And now read the executive order being signed on Friday by President Joe Biden, determined to undercut these behemoths and shift power from corporate gatekeepers to American workers. Then again, one $235 billion company stands to benefit from Biden's move -- a tech giant that's convinced everyone it's not really a tech giant, the member of FAANG never invited to those grill sessions on Capitol Hill where lawmakers use tech executives as hamburger patties. Just how did Netflix get so lucky? Netflix is far and away the leader in streaming these days. It's also the star that everyone in the entertainment business with a telescope has been watching with envy. The last few years have brought one nascent streaming service after another. Except to succeed, Hollywood studios have convinced themselves they need scale. And so, we see both vertical integration as well as horizontal consolidation. Now, through his executive order, Biden is directing federal agencies to get tougher on proposed mergers. Very solid and wise reasons exist for more vigorously blocking and even unwinding mergers. Nevertheless, one has to ask: What might be a side effect of putting up more formidable hurdles to large-scale transactions in the entertainment space? Arguably (and yes, these arguments are almost certain to be raised in future legal challenges to blocked mergers), Netflix's position as top dog becomes more entrenched. If the FTC takes Biden's tip and pulls back on Trump-era guidelines for vertical mergers, that could hurt Amazon's prospect for acquiring MGM and transforming its Prime service into Netflix's toughest competitor. (Not that FTC chair Lina Khan needs any more reasons to stick it to Amazon.) And if the DOJ begins scrutinizing proposed mergers for how they impact labor markets, that could hold ramifications for WarnerMedia-Discovery or any other future tie-up that could threaten Netflix's ability to win the streaming wars.
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