Netflix won the months-long contest to acquire Warner Bros. Discovery last week, securing a deal to merge the two entertainment powerhouses and give Netflix control of its major streaming competitor, HBO Max. However, President Donald Trump and his administration have the potential to stop this transformative acquisition before it is completed.
Media mergers frequently fall under the authority of the Federal Communications Commission, but this transaction is an exception because neither company operates broadcast stations. Nevertheless, the deal must still gain clearance from U.S. and European regulators and is anticipated to undergo an antitrust examination by the Department of Justice.
Netflix co-CEO Ted Sarandos expressed on Friday that the company was “highly confident” regulators would approve the deal. President Trump, in contrast, has suggested a tougher path ahead, stating on Sunday that the agreement “could be a problem” due to the increased market dominance it would grant Netflix and that he will “be involved” in evaluating and approving it.
“They have a very big market share,” Trump said to reporters at the Kennedy Center, speaking of Netflix. “When they have Warner Bros., that share goes up a lot.” He noted that he would seek advice from “some economists” before endorsing the transaction.
A high-ranking administration official informed TIME on Friday that it was viewing the deal with “heavy skepticism.”
When questioned about the President’s involvement in overseeing the merger, the White House directed TIME to his Sunday remarks.
According to legislation enacted by Congress in 1976, parties to significant mergers are required to submit a pre-merger notification to the Federal Trade Commission and the DOJ, including transaction specifics and relevant business and industry data. This triggers a mandatory waiting period where the deal cannot be finalized.
One of the agencies, expected to be the DOJ in this instance, then performs a thorough review of the filing for potential antitrust concerns. If problems are found, the agency can issue a second request for additional information, initiating a longer review. In this phase, the DOJ might demand more documents from the companies or interview employees and experts under oath.
Following its review, the DOJ may conclude the investigation and let the deal proceed without objection, reach a consent agreement with the companies to implement measures that revive competition, or seek to block the merger entirely by filing for a preliminary injunction in federal court.
Eleanor Fox, an antitrust and competition policy expert and professor emerita at New York University Law School, tells TIME that the agency’s review for a deal of this magnitude “doesn’t happen fast.”
Fox states that the case’s outcome hinges on the DOJ’s market definition, which could follow one of two paths. “An aggressive enforcer would look at a narrow market of streaming,” where the merger would remove competition from other streaming services, she explains. However, an administration more favorable to the deal, she adds, “would probably want to go with Warner Brothers’ proposal that the market is very, very large, and it includes cable and YouTube and Facebook and Tiktok.”
Trump signaled shortly after the deal was announced that his approach would differ from that of past presidents, who have rarely intervened in corporate merger reviews. Historically, presidents have typically distanced themselves from Justice Department decisions. Trump has emphasized in his second term that the Justice Department reports to him.
Diana Moss, former president of the American Antitrust Institute, says Trump’s method risks establishing “a terrible precedent.” “White House interference in antitrust cases, whether it’s mergers or monopolization cases or other cases, really threatens at the very core due process and the rule of law,” Moss tells TIME.
On Monday, Paramount, which Netflix outbid for Warner Bros., made an all-cash hostile counteroffer of $30 per share for the media company, surpassing Netflix’s $27.75 per share bid. Although Warner Bros.’ board has already sanctioned the Netflix agreement, Paramount’s move brings the deal into public contention.
Paramount CEO David Ellison has highlighted his relationship with Trump as an advantage to Warner Brothers’ shareholders. “I’m incredibly grateful for the relationship that I have with the president,” Ellison told CNBC. “And I also believe he believes in competition. And when you fundamentally look at the marketplace, allowing the No. 1 streaming service to combine with the No. 3 streaming service is anticompetitive.”
The merger between Paramount Global and Skydance, a billion-dollar deal approved by the Administration in July, also saw the President’s personal involvement.
Still, the Trump Administration is not the sole obstacle for this deal. Regulators at the state level and in Europe also pose challenges.
“There are states that are very feisty and many of them are ready to sue in the instance of a big antitrust problem,” Fox says, noting that merger documents must also be filed at the state level, beyond the federal requirements.
She adds that Trump’s stance toward European nations, and the influence he holds from imposing strict tariffs, might affect potential resistance from European regulators. Both companies must submit the merger for review in Europe as well, considering its possible international impact.
While Congress does not have direct power to approve or block mergers, it can significantly influence such deals and conduct its own reviews.
“Buckle up for an intense antitrust hearing in the Senate,” Republican Sen. Mike Lee of Utah, the chairman of the Senate Judiciary antitrust subcommittee, wrote in a post on Monday.
