23 NOV 2021

Major US unions oppose Amazon’s plan to buy MGM Studios

Four major US unions, including the Service Employees International Union and the Teamsters, urged the United States Federal Trade Commission on Monday to oppose Amazon’s plan to buy MGM Studios.

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Four major US unions, including the Service Employees International Union and the Teamsters, urged the United States Federal Trade Commission on Monday to oppose Amazon’s plan to buy Metro-Goldwyn-Mayer Studios, saying it would reduce competition in the streaming video market, Reuters reported.

Earlier this year, Amazon announced a deal to acquire MGM for US$8.45 billion, aiming to possess a wider library of films and television shows to compete with rivals such as Netflix and Disney+. MGM is the studio behind hit titles like the “James Bond” franchise, “The Handmaid’s Tale” and “Vikings,” among many others.

The unions, in a report by an entity they support called the Strategic Organizing Center, argued that the deal would bring Amazon's industry-leading streaming library to more than 55.000 titles, with more under development, which would give the company greater incentive to discriminate against rivals. Netflix has the second-greatest number of titles at just under 20.000, the letter said.

"The prospect of Amazon acquiring a trove of additional MGM content to build on Amazon's existing vast library should raise alarm bells. With control over MGM's vast library, Amazon may acquire enough market power over streaming content to raise prices for SVOD competitors or for SVOD consumers,"  the group said.

The unions further argued that Amazon's market power is not just "horizontal" but also "vertical,"  with the sale of electronic devices for video streaming and cloud services for storing the content of its competitors, starting with Netflix, the most popular of the SVOD platforms.

The Service Employees International Union, International Brotherhood of Teamsters, Communications Workers of America, and the United Farmworkers sent the letter to Holly Vedova, Director of the Federal Trade Commission’s Bureau of Competition.