Following the U.S. Department of Justice’s approval of the merger, the U.K. Culture Secretary may launch an investigation into potential public interest issues
Culture Secretary of the United Kingdom, Lisa Nandy, said she may intervene in the pending merger between Paramount Skydance and Warner Bros. Discovery in a statement on Tuesday.
The United States Department of Justice approved the merger on June 12, deciding after investigation that the deal did not violate U.S. antitrust laws or pose a threat to competition in the entertainment industry. Now, U.K. governing bodies have stepped in to challenge the deal.
“Following engagement with the parties and independent research, my department has today written to the current and proposed owners of Warner Bros Discovery on my behalf to inform them that I am minded to intervene,” Nandy said in a statement.
According to Nandy’s statement, the grounds for potential intervention in the public interest are to ensure there is “a sufficient plurality of views” in the news media and of those in control of media enterprises.
Paramount and Warner Bros. Discovery have until July 6 to respond to Nandy’s concerns before she decides whether a formal intervention is necessary, according to the statement.
While Nandy said that the plurality of people in control of streaming services providing on-demand content is not outlined in the Enterprise Act 2002, if she decides to intervene she will “bring forward secondary legislation” to address that concern.
“As the legislation was drafted at a time where viewing was largely via broadcast linear channels, it does not cover the effect of a merger on streaming or video-on-demand services,” Nandy said in the statement. “I believe this ought to be able to be considered in relation to this and all future media mergers given the role on-demand viewing now plays in the market.”
If she issues an Intervention Notice, the Office of Communications, the UK’s regulator, will investigate and report back if they find these public interest concerns are valid, and the Competition and Markets Authority will report on how the merger could impact competition.
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The CMA is already in the process of investigating the merger beginning June 9, and is set to make a decision about whether to further the investigation to the next phase on Aug. 7. The European Commission is also investigating funds from Saudi Arabia, Qatar and Abu Dhabi that are contributing billions to the deal, but is expected to approve the deal rather than further their investigation, according to Deadline. The Commission’s decision deadline is July 7.
According to Deadline, Paramount said it was “confident” that the deal is not a “media plurality issue,” and that the company still expects the merger to be finalized in the third quarter of this year.
“We are grateful for the continued constructive engagement with all interested government bodies and relevant authorities, including in the UK,” a Paramount spokesperson said, according to Deadline.