BURBANK, CALIFORNIA – DECEMBER 05: An aerial view of the Warner Bros. logo displayed on the water tower at Warner Bros. Studio on December 5, 2025 in Burbank, California. Netflix and Warner Bros. Discovery, Inc. have announced an $82.7 billion deal for Netflix to acquire Warner Bros. film and TV studios, HBO Max, and HBO. (Photo by Mario Tama/Getty Images)
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All eyes are on Warner Bros. Discovery (WBD) as Paramount’s efforts to acquire the company continue to escalate and Netflix has switched their offer to buy Warner Bros’ (WB) to an all-cash bid with WBD stockholders set to vote on the transaction by April 2026. With a lawsuit awaiting trial as Paramount seeks to force WBD to provide more information on their $82.7 billion deal with Netflix, there is a question of whether this fight will ultimately be moot in the end. That’s because the American federal government and international regulators like the European Union get a say in whether either of these companies can acquire WB or WBD.
Which U.S. Federal Agencies Have the Power to Block Mergers?
Domestically, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) are the nation’s enforcers of federal antitrust laws. In this case, the DOJ is overseeing the merger review process for Netflix and investigating Paramount’s hostile all-cash bid of $30/share or $108.4 billion for WBD (it’s set to expire on February 20 unless extended).
The DOJ will make a determination on whether Netflix’s acquisition of WB will give the company an outsized share of the market and depress competition. They’re the #1 streamer in the world. This purchase includes HBO and HBO Max, the premier cable destination for prestige TV and a streaming platform that ranks in the Top 4. They’d also be taking on WB’s film and television studios, which produce content for theatrical release and third-party distributors on broadcast, cable, and streaming. Not to mention they’ll own the legacy company’s catalog that stretches back over 100 years.
Why Netflix Believes Their Merger With Warner Bros. Will Be Approved
Netflix’s messaging on the acquisition has been consistent and even includes a website (netflixwbtogether.com) where they distill down the benefits of owning WB. In short, they’re holding that Netflix-WB would allow for more choice for subscribers, more opportunities for creatives, and more value for stockholders. From their perspective, all of this can be achieved without reducing competition in the market.
Netflix co-CEO Ted Sarandos spoke to this position during the company’s Q4 2025 earnings call while answering an analyst’s question about their confidence in the acquisition being approved at the completion of the regulatory process.
After explaining that they’re working closely with the DOJ and the European Commission and that they’re “expanding content creation, not collapsing it,” Sarandos stated:
“There’s never been more competition for creators. For consumer attention, for advertising and subscription dollars. The competitive lines around TV consumption are already blurring, you know, as a number of services put their content on both the linear channels and the streaming services at the same time.”
He made reference to networks simulcasting the Super Bowl, Amazon owning MGM, Apple being in the Emmy and Oscars race, YouTube outpacing BBC in monthly average audience, and Instagram making its way into the TV arena as well.
According to Sarandos, the deal “strengthens the marketplace” and will allow for “healthy competition that will benefit consumers and protect and create jobs.” This is based on all the entertainment options with which the co-CEO said Netflix is competing for attention: streaming, broadcast, cable, gaming, social media, and big tech video platforms.
However, it’s the DOJ that will define the scope of what “competition” refers to and that lens may have a narrow or broad view. If the federal agency moves to block the merger, they’ll have to prove their case in a court of law (if Netflix doesn’t abandon the deal).
Paramount is in a different position as WBD has not entered a deal with the company. But the legacy brand is subject to similar scrutiny because they intend to acquire it.
The Importance of Congress Weighing-in on the Netflix-WBD Deal
On January 7, the same day as the House Judiciary subcommittee hearing “Full Stream Ahead: Competition and Consumer Choice in Digital Streaming,” Paramount’s chief legal officer Makan Delrahim submitted a letter to Congress calling Netflix’s deal with WBD “presumptively unlawful,” while Paramount’s would not be.
But the government is putting both Netflix and Paramount under the microscope. The latter company’s intent to acquire WBD means that it if they were to succeed, they would own two major theatrical production companies, two major television production companies, two major streamers (Paramount+ is in the Top 10), and two major news outlets (CBS News and CNN) as well as add to their portfolio of cable networks that provide reality TV, lifestyle, and sports programming.
A Senate congressional hearing has been scheduled for Tuesday, February 3. Variety has confirmed that Sarandos and WBD Chief Strategy Officer Bruce Campbell will be testifying before the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, where they will fielding questions about the deal.
Ultimately, Congress does not decide whether a merger can move forward, that power lies with the FTC and the DOJ. But they can exercise influence on the process through the soft power of their hearings, investigations, and giving voice to public concern and pressure—like push back from the Hollywood unions—over the decisions being made by corporations.
What Happens If The DOJ Blocks the Netflix-WBD Deal?
As for the FTC and DOJ, the power they have as antitrust enforcers is not carte blanche, there are limitations. Whichever federal agency has reviewed the merger and sued to block the acquisition, their case must be won in court. If it is, the transaction can’t move forward. However, the merging companies can appeal the verdict. If they win the appeal, the original decision will be reversed and the acquisition will get the green light.
The government can also appeal if they lose the case, this is why it can take years for companies to merge. It’s possible the Netflix-WBD deal could be in limbo for some time if the DOJ moves to block it.