Paramount-Warner Bros.: twelve U.S. states sue to block $110 billion merger

The acquisition project of Warner Bros. by Paramount is facing a significant legal hurdle. Twelve attorneys general from as many American states, including California, New York, and New Jersey, have initiated a lawsuit to try to block the operation, valued at approximately $110 billion.

According to the proponents of the lawsuit, the merger between the two companies would significantly reduce competition in the entertainment sector, with possible negative consequences for the public and for the entire audiovisual industry. Authorities argue that a group of such size could affect prices, limit the variety of available content, and decrease creative opportunities for producers, writers, and industry professionals.

California Attorney General Rob Bonta stated that further market concentration could result in higher costs for consumers and a reduction in the plurality of stories told through cinema and television. The lawsuit also highlights that, in the film distribution market, the new group could control approximately 27% of the sector. Summing up the shares of major players like Disney, Universal, and Sony, few companies would end up dominating nearly the entire sector.

The legal action also considers the influence that the new conglomerate could exert in the cable television market, further increasing its impact on the entertainment industry.

Paramount has firmly rejected the allegations, describing the interpretation of antitrust laws as erroneous both legally and factually. The company reiterated its intention to defend the operation in all competent venues, arguing that any delays could have negative effects on workers in the sector, already hit in recent years by technological transformations.

However, several analysts believe it unlikely that the lawsuit will successfully halt the agreement, especially since the U.S. Department of Justice had already expressed a favorable opinion, asserting that the merger would not compromise competition in the streaming, pay television, and film distribution markets. Meanwhile, the European Commission continues its examination of the operation and has already secured some modifications to the agreement.