Netflix faces consumer class action over $72 billion Warner Bros deal

Netflix has been hit with a consumer lawsuit seeking to block the online video giant’s planned $72 billion acquisition of Warner Bros Discovery’s studio and streaming businesses.

Also Read | What Netflix’s Warner Bros Discovery deal means for viewers

The proposed class action was filed on Monday by a subscriber to Warner Bros-owned HBO Max who said the proposed deal threatened to reduce competition in the U.S. subscription video-on-demand market.

Some members of Congress have sharply questioned Netflix’s proposal, which is expected to face significant U.S. regulatory scrutiny under antitrust laws. Paramount Skydance on Monday launched a hostile bid worth $108.4 billion for Warner Bros Discovery (WBD) in a challenge to Netflix’s bid.

U.S. federal antitrust laws allow consumers to sue over mergers and acquisitions, separate from any federal regulatory agency lawsuit, though such cases face high legal hurdles.

Netflix, the world’s largest streaming service, in a statement said “we believe this suit is meritless and is merely an attempt by the plaintiffs bar to leverage all the attention on the deal.”

Lead attorneys for the plaintiff declined to comment.

“Netflix has demonstrated repeated willingness to raise subscription prices even while facing competition from full-scale rivals such as WBD,” the lawsuit said.

The Netflix-Warner Bros deal was announced last week following a weeks-long bidding war. On Monday, the Warner Bros Discovery board of directors said it would review Paramount’s competing offer.

The lawsuit said the Warner Bros deal would eliminate one of Netflix’s closest rivals, HBO Max, and give Netflix control over Warner Bros marquee franchises including Harry Potter, DC Comics and Game of Thrones.

Warner Bros is not a defendant in the lawsuit.

The law firm Bathaee Dunne, behind the new case, has pursued other antitrust lawsuits against major entertainment and financial companies.

In one case, the firm represents subscribers of YouTube TV and other platforms in a lawsuit accusing The Walt Disney Co of harming competition in the market for live-streamed paid television.

Disney, which has denied wrongdoing, has agreed to pay an undisclosed amount to resolve the case.