Netflix and Warner Bros deal: President Donald Trump warns on potential market power problem

President Donald Trump has rung the alarm on Netflix’s $US 72 billion ($110b) deal to buy Warner Bros. Discovery, warning the combined business might have too much market power.

Mr Trump said he had antitrust concerns — an American legal framework for reducing monopoly power — about the deal on Sunday US time.

The comments may spur concerns regulators will oppose the coupling of the world’s dominant streaming service with a Hollywood icon.

The company also faces a lengthy Justice Department review of a deal that would reshape the entertainment industry.

“Well, that’s got to go through a process, and we’ll see what happens,” Trump said when asked about the deal, confirming he met Netflix co-chief executive officer Ted Sarandos recently.

“But it is a big market share. It could be a problem.”

Bets on prediction marketplace Polymarket showed a 23 per cent chance of Netflix closing the acquisition by the end of 2026, down from around 60 per cent just before Trump’s comments.

The deal would combine the world’s No. 1 streaming player with HBO Max.

The Justice Department’s antitrust division, which would review the transaction in the US, could argue that the deal is illegal because the combined market share would put Netflix well over a 30 per cent threshold.

Netflix has “a very big market share, and when they have Warner Brothers, you know, that share goes up a lot,” Mr Trump said, adding that he will be personally involved in the decision-making process.

Netflix is expected to argue that other services such as Alphabet Inc’s YouTube and ByteDance’s TikTok should be included in any analysis of the market, which would dramatically shrink the platform’s perceived market dominance.

Bloomberg also report that Mr Sarandos met the president at the White House recently to lobby for the acquisition.

By choosing Netflix, Warner Bros jilted Paramount Skydance Corp., a move that risks touching off a political battle in Washington.

Paramount is backed by the world’s second-richest man, Larry Ellison, and has touted longstanding ties to Trump.

European Union regulators are also likely to subject the Netflix proposal to an intensive review. In the UK, the deal has already drawn scrutiny before the announcement, with House of Lords member Baroness Luciana Berger pressing the government on how the transaction would impact competition and consumer prices.

Even if antitrust reviews just focus on streaming, Netflix believes it will ultimately prevail, pointing to Amazon.com Inc’s Prime and Walt Disney Co as other major competitors, according to people familiar with the company’s thinking.

Netflix is expected to argue that more than 75 per cent of HBO Max subscribers already subscribe to Netflix, making them complementary offerings rather than competitors, said the people, who asked not to be named discussing confidential deliberations.

The company is expected to make the case that reducing its content costs through owning Warner Bros., eliminating redundant back-end technology and bundling Netflix with Max will yield lower prices.