DOJ Hits Netflix’s Warner Bros. Bid with Antitrust Probe

The Department of Justice is officially investigating Netflix's bid to acquire Warner Bros. Discovery, a major regulatory challenge first confirmed by Bloomberg. The probe centers on whether the deal would create an illegal monopoly, according to a legal demand reported on by Deadline.

• A two-horse race: The federal inquiry lands in the middle of a bidding war for the legacy media company, as Netflix faces a rival offer for WBD from a David Ellison-backed Paramount.

• The government's grip: The DOJ’s Civil Investigative Demand compels filmmakers and producers to provide sworn testimony by March 23. The document states the government is investigating if the acquisition "may substantially lessen competition, or tend to create a monopoly" in violation of the Clayton and Sherman Acts.

Netflix dismissed the probe's premise, with Chief Legal Officer David Hyman stating the company operates in an "extremely competitive market." Co-CEO Ted Sarandos jabbed at his rival from the BAFTAs in London: "Just put a better deal on the table and see if you can win." The probe threatens to delay any transaction for months, casting a shadow over the Warner Bros. Discovery shareholder vote scheduled for March 20.