Sen. Elizabeth Warren has urged the Justice Department to carefully scrutinize Disney‘s deal to acquire a controlling stake in Fubo, saying the consolidation presents antitrust concerns.
Disney announced in January that it would merge its Hulu + Live TV service with Fubo and take 70% ownership of the combined company. A few days later, Disney, Fox and Warner Bros. Discovery dropped their plans to launch Venu Sports, a combined streaming service.
In a letter to the DOJ’s Antitrust Division, Warren argued that the Disney-Fubo deal allows the company to “gobble up a competitor” and could lead to higher prices.
“This proposed acquisition raises significant concerns under antitrust law, would give Disney increased market power and incentives to increase costs for viewers, and should be regarded as another data point in Disney’s history of anticompetitive behavior,” Warren wrote.
Warren also raised alarms about Venu Sports last summer, joining with Sen. Bernie Sanders and Rep. Joaquin Castro to warn that the joint venture would dominate the market for live sports on streaming TV.
Fubo sued Disney, Fox, and WBD last year, arguing that the companies were abusing their market power to squeeze a smaller rival and potentially drive it out of business. In May, Fubo joined with DirecTV and DISH Networks to urge Congress to hold hearings on the matter.
A judge granted Fubo’s request for an injunction in August, which blocked Venu from launching.
Disney, Fox and WBD appealed. Last fall, the Biden DOJ filed an amicus brief in support of the injunction, while several Republican members of Congress opposed it, arguing that Venu would add a new offering to a competitive marketplace.
The litigation was dropped as part of the Disney-Fubo deal.
In her letter, Warren argued that Disney has effectively circumvented antitrust law by buying out an adversary.
“Disney is already one of the most powerful media companies in the world,” she wrote. “Threatened by Fubo’s lawsuit and in an apparent attempt to keep Fubo from ‘becoming the next Netflix,’ Disney has proposed a plan to acquire its competitor, and, in the process become an even more powerful force in an already highly-concentrated market.”
Fubo and Hulu + Live TV are expected to remain separate offerings, though under one corporate umbrella. Disney is will also introduce a new ESPN streaming service this fall. In an earnings call this month, CEO Bob Iger said that Venu was made “redundant” by the emergence of a number of skinny bundles.
Warren addressed her letter to Omeed Assefi, the interim head of the DOJ Antitrust Division, and copied Gail Slater, President Trump’s nominee who is awaiting confirmation to that position.
Slater previously worked as a senior vice president at Fox Corp. and was also registered as an in-house lobbyist at Roku.
In the letter, Warren noted the previous administration had “powerfully pushed back” on Disney’s efforts to launch Venu.
“I urge DOJ to continue this work on behalf of viewers by closely scrutinizing this proposed deal and blocking it if it violates antitrust law,” she added.
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