The Federal Trade Commission of USA has opened an important investigation into the corporate acquisition of MGM by Amazon, reports cane to light on Friday.
The reports by various publications have described the investigation as an in-depth official scrutiny into the deal completion. The investigation which could prove to be stretch for months.
What Is The Investigation About?
The investigation also says the corporate deal will be reviewed by the newly-appointed FTC head Lina Khan, an antitrust attorney and an Amazon critic too.
FTC focuses on “major consequences of deal on Amazon’s market power”.
Based on information from two insiders who knew about the probe, the FTC warns and wants to know that whether the deal would illegally increase Amazon’s ability to offer a wide gamut of goods and services which will not limited to content production and distribution.
Amazon’s $8.45 Billion Acquisition
Amazon had previously announced that it has reached an agreement to acquire MGM, a studio that boasts the James Bond franchise, for $ 8.45 billion on May 26, but it was widely expected in business and economic circles that this grand-merger would attract further scrutiny from the government and the expectations have now come true.
On June 22, premium news publications such as The Wall Street Journal reported that an investigation was under way and Senator Elizabeth Warren urged the company to give the agreement a “careful” review by writing a letter to Khan.
Amazon Vs FTC
The FTC declined to comment, and Amazon did not respond to a request for comment.
The investigation is the latest signal of an increase in antitrust investigations from the Biden administration.
FTC head who will be leading the Amazon-MGM acquisition Lina Khan has also reviewed Amazon for years, publishing an article titled “Amazon’s Antitrust Paradox” of the 2017 Yale Law Journal which was popular in many economic policy circles.
(Amazon, surprisingly, is not a fan of Khan, and has filed a lawsuit demanding that she be banned or at least restricted from investigating any case that involves Amazon.)
Earlier Friday, Biden signed a high-level order aimed at promoting competition and sent out an anti-monopoly message.
