Amazon Green-Lights an Antitrust Thriller

Giving the people what they want is an old maxim in Hollywood.

Amazon.com

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may be targeting the wrong people, though.

Amazon’s $8.5 billion acquisition of MGM Holdings announced Wednesday is a milestone deal for a few reasons. It is the e-commerce giant’s second largest ever following the $13.7 billion outlay for Whole Foods Market in 2017. It is also the biggest play to date among tech heavyweights with Hollywood aspirations. Apple Inc. and Google have spent large sums acquiring content and talent for their own streaming services, but none has yet taken over a studio and the library that goes with it.

MGM ranks well below major studios such as

Disney

and Warner Bros. in terms of box-office share, but it is home to several major properties such as “James Bond” and “Rocky.”

Yet this deal stands out as the boldest example yet of a tech giant tempting fate with lawmakers and regulators at a time when many have loudly expressed the belief that the company is already too powerful. Amazon was hit Tuesday with an antitrust suit by the District of Columbia, accusing the company of preventing sellers on its marketplace from offering better deals elsewhere.

Others have previously called for breakup measures, such as unwinding Amazon’s Whole Foods acquisition.

Sen. Amy Klobuchar,

who expressed misgivings about the Whole Foods merger at the time and is now head of the Senate’s antitrust subcommittee, has proposed a bill that effectively shifts the burden of proof to large companies making acquisitions. Under that measure, such companies would need to prove their deals don’t “create an appreciable risk of materially lessening competition.”

That bill isn’t law yet, and MGM’s relative size would make that seem not such a huge burden for Amazon to meet. According to The Numbers, which tracks box-office performance, MGM has averaged less than 2% of the box-office between 1995 and 2021. And Amazon Prime Video is now just one of many streaming services competing for viewers’ attention. New streaming entrants such as HBO Max, Peacock and Paramount+ are all backed by large studios with deep libraries of their own.

But Prime is also widely considered to be the second largest streaming service in terms of viewership. A Morgan Stanley survey last month found 45% of U.S. respondents said they used Prime Video—second only to

Netflix

with 58%. The attachment to Amazon’s Prime shipping service also gives the company a serious advantage.

Amazon disclosed last month that Prime subscribers have surpassed the 200 million mark, which gives Prime Video essentially one-click access to a global viewership roughly on par with category leader Netflix.

Buying MGM alone won’t make Amazon dominant in streaming, much like buying Whole Foods didn’t make the e-commerce powerhouse dominant in groceries. But the deal will strengthen Amazon’s hand in a key business right at a time when many in power feel the company’s hand is strong enough.

Putting Rocky into the Everything Store is a good way to call out those already itching for a fight.

In less than six months, China’s tech giant Ant went from planning a blockbuster IPO to restructuring in response to pressure from the central bank. As the U.S. also takes aim at big tech, here’s how China is moving faster. Photo illustration: Sharon Shi

Write to Dan Gallagher at dan.gallagher@wsj.com

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