DOJ probes Netflix’s power over filmmakers in Warner deal review

The Justice Department’s investigation of Netflix Inc.’s proposed $72 billion takeover of Warner Bros. Discovery Inc. includes scrutiny of the streaming giant’s behavior and whether it wields anticompetitive leverage over creators in negotiations for acquiring programming.

The department is seeking to determine whether the deal “may substantially lessen competition or tend to create a monopoly in violation of Section 7 of the Clayton Act or Section 2 of the Sherman Act,” according to a copy of a civil investigative demand reviewed by Bloomberg News that was sent Friday. It went to an independent movie studio, according to people familiar with the matter.

The language in the demand, an administrative subpoena that hasn’t been previously reported, is the clearest sign yet that the Trump administration is going beyond a standard deal review as it investigates the merger, refuting an argument by Netflix in recent weeks that the government is not engaged in anything beyond the typical process.

The broad scope of the review is also a strong indication that it will take many more months before the government decides whether to challenge the Netflix-Warner Bros. deal in court — a delay that may benefit rival bidder Paramount Skydance Corp. 

“Netflix operates in an extremely competitive market. Any claim that...