UPDATED: Amazon on Thursday morning announced that it closed its $8.5 billion acquisition of MGM. But the deal may not be out of the regulatory woods yet.
The Federal Trade Commission, asked about its review of Amazon’s MGM acquisition, noted that the agency has the latitude to file a legal challenge even after the parties have closed a transaction. “The FTC does not comment on any particular matters. However, we reiterate that the Commission does not approve transactions and may challenge a deal at any time if [the agency] determines that it violates the law,” FTC spokesperson Betsy Lordan said in a statement to Variety.
Later Thursday, Politico reported that the FTC won’t challenge Amazon’s MGM deal after the agency’s current four commissioners were split on bringing a suit. FTC Chair Lina Khan, who has been an outspoken critic of big tech companies including Amazon, “never called for an official vote on a complaint against Amazon” because she expected the FTC’s two Republicans would oppose it, per Politico’s report, which cited anonymous sources.
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Last year the FTC announced that it will send “pre-consummation warning letters in connection with deals it cannot fully investigate within the timelines established by the HSR Act,” Lordan said. That’s a reference to the Hart-Scott-Rodino Act, which established the federal premerger notification program to provide the FTC and the Justice Department with information about large mergers and acquisitions before they occur. According to Lordan, “These letters alert merging parties that their transactions remain under investigation, and warn that consummation occurs at their own risk.”
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Amazon declined to comment. In June, Amazon asked the FTC to block Khan from participating in antitrust reviews involving the company given her previous public criticism of Amazon.
On Tuesday, the Amazon-MGM deal was approved by the European Union’s antitrust regulator, which “unconditionally” gave it the go-ahead after finding that the overlaps between the Amazon and MGM businesses are “limited.” The European Commission also said it cleared the deal in part because “MGM’s content cannot be considered as must-have.”
Amazon has said it plans to develop MGM properties — which include the James Bond, Rocky, Robocop and Pink Panther film franchises — into new movies or TV shows.
“The acquisition’s thesis here is really very simple: MGM has a vast, deep catalog of much-loved intellectual property,” Amazon founder and executive chairman Jeff Bezos said the company’s 2021 annual meeting. “With the talented people at MGM and Amazon Studios, we can reimagine and develop that IP for the 21st century.”