Amazon.com, Inc.’s (NASDAQ: AMZN) plans to buy Metro-Goldwyn-Meyer (MGM) Studio has received opposition from four major Unions. These unions, including the Teamsters and the Service Employees International Union, implored the U.S Federal Trade Commission (FTC) to block the acquisition. The unions claim that the move would lower completion in the video streaming market.
The deal would incentivize Amazon to treat competition poorly
Amazon revealed that the agreement, which would cost it $8.45 billion, would allow it access to various T.V shows and movies to compete with Disney+ and Netflix.
The Strategic Organising Center (SOC), which supports the unions, explained that the move would give over 55,000 titles with more in development. For this reason, Amazon would have a greater incentive to discriminate against its competition. At nearly 20,000 titles, Netflix already has the second-largest library.
The group added that people should be concerned that Amazon, which already has many titles, is willing to add more to its collection. Control of MGM would incentivize the company to hike prices for streaming-video-on-demand (SVOD) consumers and SVOD competitors.
Amazon experienced tremendous growth during the COVID-19 pandemic as it attracted Prime members with its streaming services. Non-Prime members spend less than Prime members, who include about 68% of the company’s shoppers.
The FTC received a letter from the United Farmworkers, Communications Workers of America, the International Brotherhood of Teamsters, and the Service Employees International Union, voicing their concerns.
The FTC is evaluating concerns
The FTC is now in the process of examining Amazon’s deal with MGM. The agency is receiving pressure from unions and progressive politicians who want it to completely stop the sale or make the company decouple Amazon Prime Video from Prime to get approval.
The protest does not come as a surprise as the SOC tends to focus on Amazon’s impact on other industries and fights for fair treatment of its warehouse workers. David A. Goodman has also said that the acquisition shows that there needs to be more focus on reforms. Moreover, Senator Elizabeth Warren has raised the same concerns.
Amazon, on the other hand, failed to address the acquisition in its last earning calls. Critics believe this confuses opposing parties as it implies that the company does not consider the purchase necessary.