Competition watchdog clears Paramount Warner Bros acquisition
The UK competition watchdog has cleared the merger of Hollywood heavyweights Paramount and Warner Bros after concluding it does not pose an issue to competitiveness in the UK.
The Competition and Markets Authority (CMA) confirmed it would not investigate the matter further on Wednesday, as it did not “give rise to a realistic prospect of a substantial lessening of competition in the UK”.
The watchdog opened its inquiry into the £85bn deal on 9 June on the grounds that Warner Bros’ UK revenues exceed £100m.
Paramount, backed by billionaire Larry Ellison and his son David Ellison, emerged victorious in a bidding war with Netflix in February after a lengthy battle for Warner Bros, following Netflix’s refusal to raise its offer for the entertainment giant.
The media ecosystem
The CMA concluded that while the merger would make Paramount and Warner Bros the UK’s largest theatrical film distributor, it would continue to face strong competition from other market players, including Sony, Universal and Disney, as well as independent providers.
The deal will also merge the entertainment group’s children’s television channels, raising concerns the group could unfairly raise prices after bolstering its market share in the sector. The watchdog brushed off these worries on the grounds that demand for paid children’s TV is declining in favour of free-to-air broadcasters, such as the BBC, and content on streaming platforms.
The merger of popular streaming platforms Paramount+, HBO Max and Discovery+ under one company roof raised fears of weakening consumer choice.
But the UK market is heavily crowded with long-standing popular sites including Netflix, Amazon Prime and Disney Plus, which are unlikely to lose viewership to the combined media titan.
The watchdog’s decision said: “The CMA does not believe that it is or may be the case that the merger may be expected to result in a substantial lessening of competition within a market or markets in the UK. Accordingly, the merger will not be referred to a phase two investigation.”
Nandy called for intervention
Culture secretary Lisa Nandy asked the watchdog to probe the acquisition in June, then serving in the Starmer cabinet, to ensure it did not stifle the UK’s media landscape.
The Wigan MP authorised both the CMA and Ofcom to examine the impact of the deal, arguing that it threatened the “range of services available to UK audiences”.
Past interventions and scrutiny by the competition watchdog have been blasted by the public in recent years, including its 2023 decision to block Microsoft’s $70bn deal to acquire Activision Blizzard, which was overturned.
Last year, Marcus Bokkerink was sacked as chairman of the CMA, and replaced by former Amazon executive Doug Gurr, in a move that shocked City advisers at the time and was seen as a clear signal of Reeves’ approach to regulators.