Warner Bros. Discovery merger encounters speed bump, Department of Justice asked to investigate monopoly-like practices

When DC Studios canceled Batgirl in August 2022, the uproar was immediate and ferocious. As with most hot-button topics, the furor eventually died down; DC fans counted their losses, moved on, and eventually found hope in new studio heads Peter Safran and James Gunn’s plans for the future. However, it seems the cancellation of Batgirl was only the tip of the iceberg; Democratic lawmakers are now citing the incident as one of many monopoly-like practices Warner Bros. initiated since its $43 billion dollar merger with Discovery in April 2022. 

In a letter to Attorney General Merrick Garland and Assistant Attorney General Jonathan Kanter, four Democratic lawmakers including Rep. Joaquin Castro (D-TX), Rep. Pramila Jayapal (D-WA), Rep. David Cicilline (D-RI), and Sen. Elizabeth Warren (D-MA) called on the Department of Justice to investigate the way in which the Warner Bros. Discovery merger has allowed the company to “adopt potentially anticompetitive practices that reduce consumer choice and harm workers in affected labor markets,” according to the letter.

The letter states that “WBD’s aggressive measures post-merger indicate that current competition in the media and entertainment industry is inadequate. The company has the incentive and ability to eliminate broad swaths of its workforce, leaving workers with fewer choices for employment and advancement.”

In the 12 months since the historic merger, Rep. Castro said, “There have been massive layoffs. Content creators, in many cases, have been hurt. And some consumers are holding on to TV and streaming subscriptions that feature less content than a year ago.”

In addition to the 750 employees who were laid off at CNN and CNN Plus, Castro is referring to the combination of streaming platforms HBO Max and Discovery Plus, which is expected to occur near the end of 2024. After the WBD merger, 68 titles were taken off of HBO Max, and as Castro said, “Some content removed from HBO Max is not available for streaming, renting, or buying on other platforms—meaning consumers no longer have access to content they expected when paying for HBO Max.” 

Casto called into question the tiers WBD plans to incorporate into its new streaming platform. According to the letter, WBD plans to keep an ad-supported plan at $10, and an ad-free plan between $15 and $16. “However, WBD is offering a premium plan for consumers that will cost $20 a month ‘for viewers who want to view HBO’s signature shows in as high a quality as possible.’” Essentially, such a plan means customers who choose to stay within the $10 to $16 range will be subjected to lesser quality, Castro complains; on a platform that has already seen extensive reductions as it is.

Casto also asserted that the cancelation of Batgirl, which cost $90 million to make and was already “deep into post-production,” allowed WBD to claim a hefty tax break. He called WBD’s conduct “a de facto ‘catch and kill’ practice, vastly limiting consumer choice.” 

He ends the letter by calling on the DOJ to look into this post-merger conduct and reevaluate its legitimacy. It remains to be seen how the Department will address this situation, should it choose to address it at all.