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Labor Union Coalition Lobbies FTC To Block Amazon-MGM Deal: Sees “Harmful Vertical Integration In Film Industry”

The Strategic Organizing Center (SOC), a federation of labor unions repping close to 4 million workers, Wednesday called on the Federal Trade Commission to reject Amazon’s proposed $8.45 billion acquisition of MGM as a newly vigilant FTC in in the process of scrutinizing the deal that was announced in May.

In a letter sent to the acting director of the FTC’s Competition Bureau, Holly Vedova, SOC Executive Director Michael Zucker claims that Amazon has already employed anti-competitive practices in the streaming video-on-demand market and the proposed deal would let it to further leverage its power to the detriment of consumers, competitors and the film industry. SOC (formerly Change to Win) includes the Teamsters, Communications Workers of American (CWA), United Farmworkers of America and Service Employees International Union.

“Amazon’s proposed acquisition of MGM would further bolster Amazon’s ability to leverage power across multiple lines of business related to the SVOD market and create further harmful vertical integration in the film industry at large,” the SOC’s Zucker wrote. “Amazon’s current practices in SVOD and related markets – including leveraging e-commerce power to build SVOD market share, bundling Prime Video with delivery and offering Prime Video at below market prices, and exclusionary use of its dominance in the streaming device and cloud computing markets – already raise serious questions of anti-competitive conduct in the specific market that would be affected by the merger.”

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If not blocked, SOC asks the FTC for significant conditions to be placed on the merger.

The SOC says Amazon a history of leveraging its dominance in e-commerce to gain share in vertically-adjacent markets using a range of unfair and anticompetitive practices.

“This is an opportunity for the Commission to put a red light in front of the type of transaction that has proven to be so anti-competitive in the past at Amazon,” Zucker said. “If the deal proceeds, it will only allow Amazon to intensify its abusive conduct, bringing harm to numerous participants in the streaming video on demand market.”

The letter also said allowing the merger would also give Amazon expanded power to impose onerous contract terms such as all-rights provisions, which sap income from other distribution methods and can also curb the benefits of community engagement with content by, for example, restricting its availability in educational settings. And it would give the company even more creative control over content, with troubling implications for content diversity and freedom of expression, the SOC argues in its letter.

The letter is the latest in the SOC’s efforts to hold Amazon accountable to workers, competitors, taxpayers and consumers. Last year, the SOC and its affiliates submitted a petition requesting the Commission investigate a range of anti-competitive practices by Amazon, as well as a supplemental letter regarding troubling practices by Amazon during the COVID pandemic.

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