Las Vegas-Based HBO Max Subscriber Sues Netflix Over $72 Billion Warner Bros. Deal
An HBO Max subscriber has filed a class-action lawsuit over Netflix’s proposed $72 billion acquisition of Warner Bros.
Warner Bros.-owned streaming platform HBO Max includes everything from Game of Thrones to Harry Potter, James Gunn's DC Universe to Barbie, and its content is expected to be added to Netflix if and when the deal goes through.
The lawsuit, filed by a Las Vegas-based HBO Max subscriber who has never been a Netflix subscriber, argues that the deal threatens to reduce competition in the U.S. subscription video-on-demand market, and seeks to block the acquisition.
Netflix’s proposal has sparked a tough response from some members of Congress, and it is expected to face significant scrutiny under antitrust laws. Paramount, meanwhile, has launched a hostile bid worth $108.4 billion in the hope of stealing Warner Bros. out from under Netflix.
According to the LA Times, HBO Max subscriber Michelle Fendelander alleged in her lawsuit, filed in a U.S. District Court in San Jose, that if Netflix’s deal were to go through it would decrease competition in the subscription streaming market. The lawsuit asks the court to issue an injunction to prevent the merger from happening.
“American consumers — including SVOD purchasers like Plaintiff, an HBO Max subscriber — will bear the brunt of this decreased competition, paying increased prices and receiving degraded and diminished services for their money,” Fendelander’s lawsuit claims.
“The elimination of this rivalry is likely to reduce overall content output, diminish the diversity and quality of available content, and narrow the spectrum of creative voices appearing on major streaming platforms.”
In a statement, Netflix hit out at the lawsuit, saying: “We believe this suit is meritless and is merely an attempt by the plaintiffs’ bar to leverage all the attention on the deal.”
Last week, Netflix sent subscribers an email of reassurance following the news of its $82.7 billion deal to acquire Warner Bros., amid concern over potential price rises.
The email — reviewed by IGN — promises subscribers that nothing is changing “today,” and confirms that HBO Max and Netflix will continue to operate separately until the deal closes. Netflix goes on to say that there are a number of steps it needs to complete before the deal closes, including regulatory and shareholder approval. Netflix’s email does not rule out future price rises, but does promise that current membership plans will remain in place at least until the deal goes through. As for when that will be, Netflix said it expects to close the transaction in 12-18 months. So, at the earliest, December 2026, but it could be as late as summer 2027. It seems likely that Warner Bros. shows will arrive on Netflix when the deal closes, and when that happens a price rise seems inevitable.
But will the deal make it through? Democrat Senator Elizabeth Warren has called on the Justice Department to examine Netflix's buyout of Warner Bros., branding the deal "like an anti-monopoly nightmare." Netflix has said acquiring Warner Bros. would provide better value to subscribers and shareholders, but Warren insisted a Netflix-owned Warner Bros. risked job losses and higher subscription prices, and said that the Justice Department must now enforce the country's anti-monopoly laws "fairly and transparently."
In an investor call last week attended by IGN, Netflix CEO Ted Sarandos struck a confident tone when asked about the deal’s chance of success. "We're highly confident in the regulatory process," he said. "This deal is pro-consumer, pro-innovation, pro-worker, it's pro-creator, it's pro-growth.”
As part of the same call, Sarandos said Netflix would continue to release Warner Bros. movies in theaters for now, though expected theatrical release windows to shorten over time to become "more user friendly."
One report has claimed Netflix is particularly keen to obtain Warner Bros.' vast content library as the streamer ramps up its potential to offer AI-generation tools and content in the future, just weeks after Disney boss Bob Iger confirmed it would imminently begin rolling out AI content and capabilities via Disney+.
Photo by Vincent Feuray / Hans Lucas / AFP via Getty Images.
Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.
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