The Alliance of 12 State Attorneys General of California, led by the Attorney General of California, Rob Bonta, filed a lawsuit seeking to prevent the merger between Paramount and the Warner Brothers Discovery Company (WBD), claiming that the deal would harm cinemas, basic cable distributors and viewers.
Merger legal challenges
In the opinion of the Attorney-General, the acquisition was a violation of the Clayton Act, which prohibits mergers that may substantially reduce competition or tend to create a monopoly. They noted that if the two companies merged, there would be less competition in three areas: the wide distribution of cinema films, the distribution of top-end tickets and the licensing of basic cable television.
Industry opposition
The deal will merge two well-known film studios, Paramount+ and HBO Max, and will create one of the largest television networks, combining the CBS and MTV of Paramount with the CNN and HBO of the WBD. The proposal has been reviewed by filmmakers, actors and industry professionals who believe that the deal will reduce competition and further integrate the United States media industry.
Concerns about market control
The states believe that, if approved, the deal would give Paramount significant control in key areas of the entertainment industry, including 27 per cent of the United States film distribution market, 30 per cent of large film distribution and 27 per cent of the base cable channel market. In his statement, Bonta said: “Incorporation not only leads to price increases, but also reduces the opportunities for the presentation of important stories, as well as the ways in which audiences can reach different stories, perspectives and experiences.”
The other 11 states that joined California include Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington. Paramount and WBD have not yet responded to TechCrunch ' s request for comments.