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FTC chair Lina Khan faces an Amazon paradox over MGM deal

Tim Baysinger
Mar 16, 2022
Photo illustration: Gabriella Turrisi/Axios. Photo: Saul Loeb/Pool/AFP via Getty Images

Photo illustration of Lina Khan with a scale and a strip of film.

FTC chair Lina Khan will soon be faced with a decision of whether or not to allow Amazon's $8.45 billion purchase of MGM, which has already gotten approval overseas.

Why it matters: Khan rose to prominence largely due to her antitrust stance against big tech giants like Amazon.

  • Approving a major acquisition by Amazon in her first big merger review could place her in the crosshairs of antitrust advocates.
  • Yet legal experts argue the FTC would have to hugely break with past precedent if it wanted to sue to block the deal.
  • Her 2017 Yale Law Journal article "Amazon's Antitrust Paradox" argued that Amazon's retail business should be separated from its selling platform.

Driving the news: The European Commission signed off on the deal yesterday without imposing any conditions, Axios' Margaret Harding McGill reports.

  • The commission believes the deal would not significantly reduce competition.
  • "Even in the national markets where Amazon has a sizable market presence among video streaming platforms, the commission found that Amazon faces strong competition from other players," the commission said.

Catch up quick: Jonathan Kanter, who heads up the Justice Department's Antitrust Division, said earlier this year that he no longer wanted to allow for merger approvals with conditions.

  • This means that rather than approve mergers requiring certain conditions or divestitures, the DOJ would either approve them full stop or sue to block.

What's next: The FTC faces a mid-March deadline to act on the merger, according to a Wall Street Journal report.

  • The commission is currently deadlocked at two Democrats and two Republicans, and it's unclear whether she has the votes to sue to block the deal.
  • Alvaro Bedoya, who was nominated to be the fifth commissioner by President Biden last September, is still going through the confirmation process.
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