    [House Hearing, 119 Congress]
    [From the U.S. Government Publishing Office]

                       FULL STREAM AHEAD: COMPETITION AND
                      CONSUMER CHOICE IN DIGITAL STREAMING

    =======================================================================

                                    HEARING

                                   BEFORE THE

       SUBCOMMITTEE ON THE ADMINISTRATIVE STATE, REGULATORY REFORM, AND
                                   ANTITRUST

                           COMMITTEE ON THE JUDICIARY

                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED NINETEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                           WEDNESDAY, JANUARY 7, 2026

                                   __________

                               Serial No. 119-48

                                   __________

             Printed for the use of the Committee on the Judiciary

                   [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                   Available via: http://judiciary.house.gov

                                  ______

                     U.S. GOVERNMENT PUBLISHING OFFICE

    62-503                   WASHINGTON : 2026

                           COMMITTEE ON THE JUDICIARY

                            JIM JORDAN, Ohio, Chair

    DARRELL ISSA, California             JAMIE RASKIN, Maryland, Ranking
    ANDY BIGGS, Arizona                      Member
    TOM McCLINTOCK, California           JERROLD NADLER, New York
    THOMAS P. TIFFANY, Wisconsin         ZOE LOFGREN, California
    THOMAS MASSIE, Kentucky              STEVE COHEN, Tennessee
    CHIP ROY, Texas                      HENRY C. ``HANK'' JOHNSON, Jr.,
    SCOTT FITZGERALD, Wisconsin              Georgia
    BEN CLINE, Virginia                  ERIC SWALWELL, California
    LANCE GOODEN, Texas                  TED LIEU, California
    JEFFERSON VAN DREW, New Jersey       PRAMILA JAYAPAL, Washington
    TROY E. NEHLS, Texas                 J. LUIS CORREA, California
    BARRY MOORE, Alabama                 MARY GAY SCANLON, Pennsylvania
    KEVIN KILEY, California              JOE NEGUSE, Colorado
    HARRIET M. HAGEMAN, Wyoming          LUCY McBATH, Georgia
    LAUREL M. LEE, Florida               DEBORAH K. ROSS, North Carolina
    WESLEY HUNT, Texas                   BECCA BALINT, Vermont
    RUSSELL FRY, South Carolina          JESUS G. ``CHUY'' GARCIA, Illinois
    GLENN GROTHMAN, Wisconsin            SYDNEY KAMLAGER-DOVE, California
    BRAD KNOTT, North Carolina           JARED MOSKOWITZ, Florida
    MARK HARRIS, North Carolina          DANIEL S. GOLDMAN, New York
    ROBERT F. ONDER, Jr., Missouri       JASMINE CROCKETT, Texas
    DEREK SCHMIDT, Kansas
    BRANDON GILL, Texas
    MICHAEL BAUMGARTNER, Washington
                                     ------

                   SUBCOMMITTEE ON THE ADMINISTRATIVE STATE,
                        REGULATORY REFORM, AND ANTITRUST

                       SCOTT FITZGERALD, Wisconsin, Chair

    DARRELL ISSA, California             JERROLD NADLER, New York, Ranking
    BEN CLINE, Virginia                      Member
    LANCE GOODEN, Texas                  J. LUIS CORREA, California
    HARRIET HAGEMAN, Wyoming             BECCA BALINT, Vermont
    MARK HARRIS, North Carolina          JESUS G. ``CHUY'' GARCIA, Illinois
    DEREK SCHMIDT, Kansas                ZOE LOFGREN, California
    MICHAEL BAUMGARTNER, Washington      HENRY C. ``HANK'' JOHNSON, Jr.,
                                             Georgia

                   CHRISTOPHER HIXON, Majority Staff Director
                    ARTHUR EWENCZYK, Minority Staff Director

                                C O N T E N T S

                                  ----------

                           Wednesday, January 7, 2026

                               OPENING STATEMENTS

                                                                       Page
    The Honorable Scott Fitzgerald, Chair of the Subcommittee on the
      Administrative State, Regulatory Reform, and Antitrust from the
      State of Wisconsin.............................................     1
    The Honorable Jerrold Nadler, Ranking Member of the Subcommittee
      on the Administrative State, Regulatory Reform, and Antitrust
      from the State of New York.....................................     3
    The Honorable Jamie Raskin, Ranking Member of the Committee on
      the Judiciary from the State of Maryland.......................     6

                                   WITNESSES

    Jay Ezrielev, Founder, Managing Principal, Elevecon, LLC
      Oral Testimony.................................................     9
      Prepared Testimony.............................................    11
    Jessica Melugin, Director, Center for Technology & Innovation,
      Competitive Enterprise Institute
      Oral Testimony.................................................    16
      Prepared Testimony.............................................    18
    John M. Yun, Professor of Law, Antonin Scalia Law School, George
      Mason University
      Oral Testimony.................................................    21
      Prepared Testimony.............................................    23
    Matthew F. Wood, Vice President, Policy and General Counsel, Free
      Press
      Oral Testimony.................................................    39
      Prepared Testimony.............................................    41

              LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING

    All materials submitted for the record by the Subcommittee on the
      Administrative State, Regulatory Reform, and Antitrust are
      listed below...................................................    78

    Materials submitted by the Honorable Jerrold Nadler, Ranking
      Member of the Subcommittee on the Administrative State,
      Regulatory Reform, and Antitrust from the State of New York,
      for the record
        A statement entitled, ``IDA Statement Opposing A Merger
            Involving Warner Bros. Discovery,'' Oct. 29, 2025,
            International Documentary Association (IDA)
        A press release entitled, ``DGA Statement on Warner Bros.
            Discovery/Netflix,'' Dec. 5, 2025, Directors Guild of
            America
        A statement entitled, ``SAG-AFTRA Statement Regarding
            Proposed Netflix/Warner Bros. Transaction,'' Dec. 5,
            2025, Screen Actors Guild-American Federation of
            Television and Radio Artists (SAG-AFTRA)
        A statement entitled, ``The Warner Bros. Acquisition Is a
            Threat to Workers, Consumers, and American Culture--It
            Must Be Blocked,'' Jan. 7, 2026, Writers Guild of America
            West and Writers Guild of America East
        An article entitled, ``Hollywood Teamsters: Warner-Netflix
            Geal Is `Another Call for Alarm' for Entertainment
            Workers,'' Dec. 5, 2025, The Wrap
        A statement from the Producers Guild of America, Jan. 6, 2026
        A statement from the American Economic Liberties Project,
            Jan. 7, 2026
        An article entitled, ``The Warner Bros. Curse,'' Dec. 16,
            2025, Planet Money, NPR
        An article entitled, ``There are no good outcomes for the
            Warmer Bros. sale,'' Dec. 10, 2025, The Verges
        A report entitled, ``A More Perfect Media: Saving America's
            Fourth Estate from Billionaires, Broligarchy and Trump,''
            Jul. 14, 2025, Free Press
        A press release entitled, ``Press Freedom Groups Tell FCC:
            Media Consolidation Poses Grave Threat to Independent
            News and Information in the United States,'' Aug. 5,
            2025, Free Press
    A statement from Cinema United, Jan. 7, 2026, submitted by the
      Honorable Derek Schmidt, a Member of the Subcommittee on the
      Administrative State, Regulatory Reform, and Antitrust from the
      State of Kansas, and the Honorable Jerrold Nadler, Ranking
      Member of the Subcommittee on the Administrative State,
      Regulatory Reform, and Antitrust from the State of New York,
      for the record
    Materials submitted by the Honorable Becca Balint, a Member of
      the Subcommittee on the Administrative State, Regulatory
      Reform, and Antitrust from the State of Vermont, for the record
        An article entitled, ``Movie Theatres Dread Any Warner Bros.
            Merger, Fear `Tipping Point' Where While System
            `rumbles,' '' The Hollywood Reporter
        An article entitled, ``Gen Z Went to Movies the Most Often in
            2025,'' Dec. 17, 2025, Indie Wire
    A statement from Makan Delrahim, Chief Legal Officer, Paramount
      Skydance Corporation, Jan. 7, 2026, submitted by the Honorable
      Jim Jordan, Chair of the Committee on the Judiciary from the
      State of Ohio, for the record
    Materials submitted by the Honorable Scott Fitzgerald, Chair of
      the Subcommittee on the Administrative State, Regulatory
      Reform, and Antitrust from the State of Wisconsin, for the
      record
        An article entitled, ``A Merger Could Bring Better
            Streaming,'' Dec. 14, 2025, The Wall Street Journal
        An article entitled, ``Netflix-Warner Bros. Deal Is Free
            Market David Slaying Hollywood's Outdated, Greedy
            Goliath,'' Jan. 3, 2026, Townhall
        An article entitled, ``The Netflix-Warner Brothers Deal Puts
            America First,'' Jan. 5, 2026, Townhall

                                    APPENDIX

    A statement from Dr. Courtney Radsch, Director, Center for
      Journalism & Liberty, Jan. 7, 2026, submitted by the Honorable
      Jerrold Nadler, Ranking Member of the Subcommittee on the
      Administrative State, Regulatory Reform, and Antitrust from the
      State of New York, for the record

                    QUESTIONS AND RESPONSES FOR THEE RECORD

    Questions submitted by the Honorable Scott Fitzgerald, Chair of
      the Subcommittee on the Administrative State, Regulatory
      Reform, and Antitrust from the State of Wisconsin, for the
      record
      Questions for Jessica Melugin, Director, Center for Technology
          & Innovation, Competitive Enterprise Institute
        Response from Jessica Melugin, Director, Center for
            Technology & Innovation, Competitive Enterprise Institute
      Questions for Jay Ezrielev, Founder, Managing Principal,
          Elevecon, LLC
        Response from Jay Ezrielev, Founder, Managing Principal,
            Elevecon, LLC
      Questions for John M. Yun, Professor of Law, Antonin Scalia Law
          School, George Mason University
        Response from John M. Yun, Professor of Law, Antonin Scalia
            Law School, George Mason University
    Questions for Matthew F. Wood, Vice President, Policy and General
      Counsel, Free Press, submitted by the Honorable Jerrold Nadler,
      Ranking Member of the Subcommittee on the Administrative State,
      Regulatory Reform, and Antitrust from the State of New York,
      for the record
        Response from Matthew F. Wood, Vice President, Policy and
            General Counsel, Free Press

                       FULL STREAM AHEAD: COMPETITION AND
                      CONSUMER CHOICE IN DIGITAL STREAMING

                                  ----------

                           Wednesday, January 7, 2026

                            House of Representatives

                   Subcommittee on the Administrative State,

                        Regulatory Reform, and Antitrust

                           Committee on the Judiciary

                                 Washington, DC

        The Subcommittee met, pursuant to notice, at 10:05 a.m., in
    Room 2141, Rayburn House Office Building, the Hon. Scott
    Fitzgerald [Chair of the Subcommittee] presiding.
        Present: Representatives Fitzgerald, Jordan, Issa, Cline,
    Gooden, Hageman, Harris, Baumgartner, Nadler, Raskin, Correa,
    Balint, Garcia, Lofgren, and Johnson.
        Mr. Fitzgerald. The Subcommittee will come to order.
    Without objection, the Chair is authorized to declare a recess
    at any time.
        We welcome everyone to today's hearing on ``Competition and
    Consumer Choice in Digital Streaming.'' I will recognize myself
    for an opening statement. Before, I know the witnesses are
    aware and I think the Members are, we have a briefing on
    Venezuela at 11:30, so we're going to kind of see how things
    flow and how we move here today, and, depending on that--I know
    there are some Members that absolutely want to attend that, so
    we'll just keep that in mind as we move through this.
        For much of the 20th century, film distribution was
    dominated by theatrical release. The golden age of Hollywood
    saw the rise of movie stars in Blockbuster hits that drew
    millions to the box office. The creation of television in the
    1950s introduced a new and innovative way to consume media.
        What was initially seen as a threat to the film industry
    instead became one of its greatest synergies. Studios began
    licensing films for TV broadcast, and the advent of the VHS
    tape and DVD player opened up an additional revenue extreme for
    direct consumer video sales.
        The emergence of digital technology and broadband internet
    fundamentally disrupted this model and, with it, the dominant
    players. In the year 2000, only 1 percent of households had
    broadband internet capability and that capability of delivering
    high-quality videos online. By 2023, that number reached 80
    percent of U.S. households.
        Streaming platforms eliminated the need for theatrical
    releases and physical distribution, which we know was troubling
    to the industry. Instead of relying on theater chains, our
    video sales content could be delivered directly to consumers on
    demand. This shift lowered barriers to entry and enabled the
    new competitors to challenge traditional studios on a global
    scale. The result, as we're seeing today, is studios that did
    not exist in Hollywood's golden age, acquiring the ones that
    did.
        The injection of disruptors has also forced legacy studios
    to adapt to that. Netflix's introduction of the first streaming
    only model in 2010 forced Paramount, Disney, Warner Brothers,
    and others to develop their own platforms. Fifteen years later,
    nearly all major film and TV studios have their own streaming
    platforms.
        Today, digital streaming is a primary method for consumers
    to use and to develop access to TV and other media content.
    According to a 2025 Nielsen report, streaming represented
    nearly 47 percent of total TV usage and, for the first time
    ever, outpaced the combined share of broadcast and cable. As
    more content becomes fractionalized across multiple streaming
    services, consumers are growing frustrated.
        Separate, Nielsen's survey found that 46 percent of
    streaming viewers are finding it difficult to find the content
    they want to watch because of too many services.
        A survey by the Motley Fool found that the number is even
    higher with 62 percent of subscribers surveyed believing there
    are too many options. This is particularly acute in sports
    broadcasting. Fans who want to watch their favorite sports
    teams are now having to subscribe to multiple streaming
    platforms to access each game. This frustration is driven in
    large part by increased prices.
        According to The Wall Street Journal, since 2019, prices
    for the top streaming services have risen an average of 87
    percent. Disney Plus, Apple TV, and NBC Peacock have all seen
    price increases of more than 100 percent since their creation.
    Households who subscribe to an average of four streaming
    platforms are quickly seeing their monthly streaming bills
    equal or surpassing their monthly cable bill.
        As consumer demand for streaming continues to rise,
    platforms must compete for viewers by offering high-quality
    content. Netflix, Apple, and Amazon, for example, have made
    significant investments in movie studios to deliver
    Blockbuster-level movies and award-winning TV straight to
    consumers, and it appears to be working. Netflix has 18 Oscar
    nominations in 2025, and Apple TV Pluribus just became the most
    watched show in the streaming studio's history, but that
    content does not come without a cost.
        To make a Blockbuster film will now cost the studio more
    than $200 million. A high-end TV show could easily exceed $10
    million per episode. Pluribus cost Apple TV a reported $15
    million an episode. As a result, many of these companies
    operate with negative profit margins for several years before
    achieving profitability. Netflix is the only platform to
    maintain consistent profitability since 2022.
        In other words, the barrier to sustaining a competitive
    streaming service is high. It's no surprise then that many of
    these companies are choosing to buy rather than build their own
    content. Disney, for example, acquired 20th Century Fox in
    2019. Amazon acquired MGM Studios in 2022. Most recently,
    Netflix announced an agreement to acquire Warner Brothers
    Studio. This deal, one of the largest of 2025, would combine
    two of the top four streaming services by global subscriber
    count. As expected, the reactions to this merger have been
    mixed.
        Let me be clear. This hearing is not about picking winners
    or losers in the merger context. This is for Warner Brothers
    shareholders. Today, we're here to start a much-needed
    conversation about whether further consolidation in the
    streaming industry would be helpful or harmful to consumers.
        Economic theory teaches us that mergers create
    efficiencies, and that's no different when it comes to the
    streaming industry. By vertically integrating content
    production and distribution, platforms can eliminate and also
    work on lowering redundancies and focus on delivering high-
    quality content to consumers at lower prices.
        Some will argue that eliminating arrival will hurt
    competition or further entrench a dominant player. Others may
    say it will harm our already distressed theatrical film
    industry. We should take all those concerns very seriously.
        I would remind colleagues that the antitrust law is meant
    to protect consumers by promoting competition, and any
    potential harm should always be weighed against consumer
    benefit. A merger that results in greater choice in video
    libraries at lower prices is welcomed.
        While delivering to consumers a solution to their current
    frustration with the fractionalized streaming content, it does
    not strike me, certainly, to think, and many of the other
    members, as a merger, we should initially be concerned with a
    look at the entire entity of what's being promised.
        I want to thank our witnesses for being here with us today,
    and I look forward to your testimony.
        I now will recognize the Ranking Member, Mr. Nadler, for
    his opening statement.
        Mr. Nadler. Thank you, Mr. Chair. Mr. Chair, the
    entertainment and media landscape has been transformed in
    recent years. Many of these changes have brought undeniable
    benefits, such as streaming services that give viewers more
    options at their fingerprints than ever before. Many of these
    changes have also come at a cost, as lax antitrust enforcement
    and waves of consolidation have concentrated power in just a
    few major players.
        One thing that seems to be constant over the last few
    decades: A merger involving Warner Brothers. It began with the
    disastrous AOL-Time Warner merger in 2000, and then the short-
    lived partnership with AT&T in 2019, and then its latest
    incarnation since 2021 as Warner Brothers Discovery. Now, once
    again, Warner Brothers is up for sale to another media giant.
        This time, it has accepted a bid from Netflix, the global
    leader in streaming services and a major content producer in
    its own right, to control Warner's streaming and studio assets,
    including such mammoth properties as DC Studios, HBO and HBO
    Max, and Warner Brothers' motion picture and television groups,
    as well as Warner's 128 million streaming subscribers.
        What we know today about this proposal raises a host of
    questions about its effect on the pricing, production, and
    distribution of content going forward. We have also heard great
    alarm from the movie theater industry, which despite claims
    from Netflix that it will keep theatrical businesses operating
    largely as they are, takes seriously comments from its co-CEO
    who called movie theaters, quote, ``an outmoded idea'' and,
    quote, ``not consumer friendly.''
        Further, label groups like the Writers Guild of America and
    the Directors Guild have raised concerns and say that this
    proposed merger is not in their interest or the publics.
        Serious concerns have been raised about whether this deal,
    which by some measures would give the merged company over 30
    percent of the streaming market, could reduce competition,
    diminish consumer choice, raise subscription prices, threaten
    jobs, wages, and working conditions in the creative industries,
    and reduce diversity of content and viewpoints.
        Netflix argues that this merger would allow it to better
    compete with the range of other platforms that are battling for
    eyeballs and attention from viewers, including other streaming
    giants like YouTube, traditional movies and television, social
    media, and more. If Netflix must get bigger to compete, that is
    a sign of a market that is already highly out of balance.
        Under the Netflix deal, Warner's cable channels, including,
    most notably, CNN, would be spun off into a separate business
    that would not be part of the sale. Another major media
    conglomerate, Paramount Skydance, has now made a hostile bid to
    control all of Warner's properties, including CNN.
        Even though the Warner Brothers' board has rejected the
    Paramount bid for now, Paramount could still pursue a buyout of
    Warner Brothers. A potential merger with Paramount presents its
    own set of antitrust concerns, by collapsing what are now five
    major movie studios down to four, thereby reducing competition
    and substantially increasing concentration within an already
    concentrated industry. Not only could this bring higher prices
    and less choices for consumers, but it could also bring fewer
    jobs and lower wages for content creators.
        The Paramount bid also brings its own unique set of
    circumstances of concerns because it would place CNN under the
    control of the Ellison family, the same billionaires who have
    curried favor with Donald Trump by imposing control over the
    content of CBS News.
        Just weeks ago, Bari Weiss, the controversial minder placed
    in charge of CBS News, spiked a story on 60 Minutes that would
    have shed light on the Trump Administration's lawless campaign
    to send migrants to be tortured in an El Salvadoran prison.
    Presumably, the Ellisons have similar designs on making CNN
    more Trump friendly.
        A merger with either Netflix or Paramount would result in a
    behemoth that poses significant antitrust and other public
    policy concerns that require careful scrutiny.
        I have long believed that the unchecked concentration of
    economic power in any industry poses a danger to economic
    fairness and to our democracy. While I do not prejudge the
    merits of any proposed merger, I am concerned with any deal
    that would significantly increase the concentration in a market
    that is already highly concentrated. Such increased
    concentration could not only harm consumers, but we have also
    heard great concern from the creator guilds who are borne the
    brunt of decades of media consolidation that historically has
    been followed by fewer jobs, downward pressure on wages, and
    reduced creative opportunities.
        That is why it is so important that any merger be reviewed
    with careful and impartial analysis by the antitrust
    regulators. Unfortunately, under the Trump Administration, the
    antitrust review process has been dangerously corrupted and
    politicized.
        Just last month, we heard from a former senior Trump
    Administration antitrust official who testified that, under
    this administration, the rule of law is being replaced by the
    rule of lobbyists and corporate interests.
        We know that the White House routinely intervenes in
    Justice Department matters, often to benefit the President and
    his cronies. Already, Trump himself has said, quote, ``I'll be
    involved in that decision,'' when asked about the Warner
    Brothers deal.
        Does he intend to put his thumb on the scale in favor of
    Paramount as a reward for his friends, the Ellisons who,
    according to press reports, have already promised to implement,
    quote, ``sweeping changes'' over CNN if they were to take
    control? This is not a farfetched scenario. There are troubling
    reports that Trump tried to block the AT&T-Time Warner merger
    as retaliation for CNN's critical coverage of him during his
    first administration and campaign.
        Mr. Chair, we have seen this movie before, and the sequel
    is almost always worse. A hallmark of the second Trump
    Administration has been a determined effort to exercise control
    over the independent news media, whether through frivolous
    lawsuits against media outfits, limiting press access to the
    White House and the Pentagon, and gutting funding for public
    radio and PBS. The White House must not be allowed to use the
    merger review process as another tool in its campaign to bend
    the media to its will.
        A proposed merger, whether it be with Netflix, Paramount,
    or some other suitor, must be analyzed on its own merits. What
    we know already about the antitrust review process under this
    administration calls for serious congressional oversight, and,
    unfortunately, our Republican colleagues have turned a blind
    eye to their oversight responsibilities during this Congress
    and today is just one more missed opportunity.
        It is vitally important that we examine the Warner
    Brothers' merger closely to ensure that any deal will protect
    competition, consumers, and workers, and I appreciate our
    witnesses being here today to lend their expertise. I look
    forward to today's hearing, and I yield back.
        Mr. Fitzgerald. The gentleman yields back. I now recognize
    the Ranking Member of the Full Committee, Mr. Raskin, for his
    opening statement.
        Mr. Raskin. Mr. Chair, thank you very much, and thank you
    to all the witnesses for joining us today.
        Against the background of a media industry that is already
    heavily concentrated under the control of several multibillion-
    dollar media companies, we're gathered to discuss the proposed
    acquisition of Warner Brothers Discovery by Netflix, two giant
    rivals in the field of entertainment. The alternative acquirer,
    Paramount Skydance, is itself not only a giant rival in
    entertainment but also a rival in news.
        In ordinary times, we'd proceed carefully with an
    acquisition of this size to ensure that it passes scrutiny
    under American antitrust laws, but these are not ordinary
    times. Just last month, this Subcommittee heard testimony from
    whistleblower Roger Alford who served in antitrust at the DOJ
    during both the first and second Trump terms. During Trump's
    first term, Alford served as Deputy Assistant AG and during the
    second as the principal Deputy Assistant AG, which is second in
    command.
        He testified to the pervasive practice of lobbyists
    attempting to corruptly influence antitrust law enforcement at
    the Department of Justice, telling us that corporate lobbyists
    now boast about their ability to overrule both the professional
    antitrust experts and President Trump's own hand-picked
    leadership at the antitrust division. Just to be clear,
    Professor Alford is a strong supporter of President Trump. He
    served in both the first and second terms.
        He sees clearly that this political and financial
    corruption of antitrust law betrays Donald Trump's avowed
    populist agenda, as he sees it, the one of lower prices,
    affordability, and increased choice and competition that the
    President once long ago promised the American people on the
    campaign trail. Well, we already know well how this corruption
    works in Trump's Washington.
        Professor Alford gave a detailed description of what he
    called the HPE-Juniper merger scandal. He told us that on
    numerous occasions in a variety of matters, we implored our
    superiors and lawyers on the other side to call off the
    jackals, but to no avail. Today, cases are being resolved based
    on political connections, not on the legal merits.
        These warnings from a top Trump appointee command our
    urgent attention. Yet, my Republican colleagues refuse to
    conduct any kind of serious oversight of what's going on in the
    administration.
        In 12 months, our colleagues have had just one
    administration official come and appear before the Committee:
    FBI Director Kash Patel. Committee Democrats have invited two
    Trump officials as Minority witnesses, and, as you know, we
    only get to invite one witness, but we have had two of them:
    Mr. Alford and FTC Commissioner Alvaro Bedoya. The Chair has
    had only one.
        We urgently need the Attorney General, Pam Bondi, to appear
    before the Judiciary so we can conduct oversight over an
    increasingly out of control, lawless, and corrupt Department of
    Justice, both in the antitrust domain and in many others.
        It's not just DOJ. The whole government is now saturated in
    pay to play corruption and lawlessness. Take the example of
    Skydance's acquisition of Paramount last year. In late 2024,
    incoming FCC Commissioner Brendan Carr accepted two tickets
    worth $12,000 to go to the Kennedy Center Gala. The donor was
    Paramount whose proposed merger with Skydance was about to
    acquire Commissioner Carr's approval.
        Now, I concede that $12,000 these days is petty cash
    compared to the billions of dollars that are being raked in by
    the President routinely and the corruption flowing throughout
    the administration, but pre-Trump, a $12,000 gift to an FCC
    commissioner that you're about to appear before would have been
    a scandal.
        Well, at the gala, Commissioner Carr reportedly pulled his
    host aside and gave them advice. Paramount owns CBS. President
    Trump had sued CBS for $10 billion in damages because he didn't
    like the way that they edited an interview with Vice-President
    Kamala Harris. Well, that, of course, is an entirely frivolous
    legal claim. I don't like the way that Fox News edits the
    interviews with Donald Trump, but that doesn't constitute
    defamation against me. That's just stupid.
        Commissioner Carr reportedly told the Paramount executives
    that Trump's grudge against CBS News was so serious that it
    would make review of the merger, quote, ``tougher than
    anticipated,'' and they might need to make some concessions
    directly to the President to convince him to approve the deal.
        Once in office, Carr sat on the merger for months. Why?
    Trump could extract extraordinary benefits from the companies
    in exchange for approval of the deal. Look what he got: A $16
    million contribution to his Presidential library, millions
    dollars more committed in free advertising, a promise to
    install a Trump-friendly monitor minder in the CBS newsroom,
    and the cancellation of the Late Show with Stephen Colbert.
    Only then did Carr permit the merger to proceed.
        Ladies and gentlemen, this is not antitrust law. This is a
    political and financial shakedown substituting for an antitrust
    merger review. It's got nothing to do with antitrust law or
    consumer choice or lower prices. It is corruption. It's exactly
    what Professor Alford was warning us about, and one key result
    of this corruption is a newsroom that refuses to broadcast news
    that the administration disfavors.
        A few days after Alford testified, CBS' 60 Minutes was
    scheduled to air a special on CECOT, the notorious torture
    prison in El Salvador, introduced to inmates there as hell on
    earth, that the Trump Administration has used as a dumping
    ground for immigrants, many of them lawful asylum seekers.
        Right before the story was set to air, it was indefinitely
    postponed. Why? What happened? Well, we don't have to wonder.
    Bari Weiss, the new Editor-in-Chief at CBS and the new
    government-imposed Pravda-Like media monitor and minder said
    she would not let the broadcast go forward without getting
    comment from a government spokesperson on the air. The Trump
    Administration had refused to allow any of them to comment on
    the air.
        Here's Sharyn Alfonis, the 60 Minutes correspondent who
    said:

            Our story was screened five times and cleared by both CBS
            attorneys and Standards and Practices. It was factually
            correct. In my view, pulling it now after every rigorous
            internal check has been met is not an editorial decision. It's
            a political one. We requested responses to questions in our
            interviews with DHS, the White House, and the State Department.
            Government silence is a statement. It's not a veto. Their
            refusal to be interviewed is a tactical maneuver designed to
            kill the story. If the administration's refusal to participant
            becomes a valid reason to spike a story, we have effectively
            handed the government a kill switch for any reporting they find
            inconvenient.

        I hope that this kind of consolidated corporate government
    censorship troubles all our colleagues, Democrats and
    Republicans who still have a First Amendment bone in their
    body. This kind of censorship regime aligns us with the State
    of press freedom in Putin's Russia or Mohammad bin Salman's
    Saudi Arabia.
        The economic effects of these side deals must trouble us,
    too. Each new merger acts as a new opportunity for the
    President to enrich himself and his family and friends. The
    cost of businesses involved in these deals now, even as a term
    in the economic literature, the Trump Transaction Tax, every
    party to this kind of transaction now bears the risk of a
    political shakedown for money, concessions that are not
    connected to proper antitrust review. It's about what enriches
    and satisfies the President.
        Hundreds of economic studies and gangster States show that
    these kinds of corrupt practices reduce investment, distort
    markets, increase costs, and lead to lower employment.
        Here we are again. When Warner Brothers announced that it
    would put itself up for sale, President Trump promised that
    ``I'll be involved in that decision,'' although no law gives
    him a role in it.
        Mr. Issa. Mr. Chair, I must object. I fully believe that
    opening statements can be as long as--for the Ranking Members,
    can be as long as necessary if they stay on topic. This is
    clearly a bashing of the President and beyond the pale of this
    Committee.
        Mr. Raskin. I'm not going to accept any subject matter or
    content regulation by the gentleman from California. I'm about
    to finish, so let's not belabor a ridiculous point. We've never
    interrupted an opening statement of anybody on your side of the
    aisle. What a ridiculous thing to do.
        Mr. Fitzgerald. I would just remind the Ranking Member that
    we're up against an 11:30 kind of hard stop for a briefing.
        Mr. Raskin. OK. I appreciate that and I'll be done in a
    minute. OK?
        The President seems to want Paramount and Netflix to
    compete for his approval of a deal. Both companies are already
    lobbying the White House right now, and to State the obvious,
    President Trump is not an antitrust expert, nor is he committed
    to antitrust law. He's long been critical of CNN, which is
    owned by Warner Brothers. For years, he's told us that he hates
    their reporting, he hates their reporters, and he wants to sue
    the network.
        Does anyone doubt that one way to entice the President's
    favor is to promise him more direct control over CNN?
        Mr. Chair, we should be calling in the government officials
    who participated in or acquiesced in these side deals. To date,
    I am sorry to say the closest we've gotten to hearing from a
    real administration witness is Professor Alford who we invited
    here at the Minority's invitation when he could have been your
    witness months ago.
        This proposed merger poses significant antitrust questions.
    I'm eager to discuss them, but this Committee must also do the
    work of ensuring that the antitrust laws are actually being
    enforced and not being replaced by a system of corruption.
        Thank you, Mr. Chair. I yield back.
        Mr. Fitzgerald. The Ranking Member yields back. Without
    objection, all their opening statements will be included in the
    record.
        We'll now introduce today's witnesses: Mr. Jay Ezrielev is
    the founding and managing principal of Elevecon, a consulting
    firm. He also serves as an adjunct Professor at George Mason
    University Antonin Scalia Law School. He previously served as
    an economic adviser to the FTC Chair Joseph Simons.
        Ms. Jessica Melugin: Ms. Melugin is the Director of the
    Center for Technology and Innovation at the Competitive
    Enterprise Institute. Her research focuses on antitrust, online
    privacy, artificial intelligence, telecommunications, social
    media, and net neutrality regulation.
        Dr. John Yun: Dr. Yun is a Professor of Law at the George
    Mason University Antonin Scalia Law School. His research
    focuses on antitrust and intellectual property, data, and
    privacy. He previously served as the Acting Deputy Assistant
    Director of the Bureau of Economics at the Federal Trade
    Commission.
        Mr. Matt Wood: Mr. Wood is the Vice President of Policy and
    General Counsel at Free Press, a nonprofit organization that
    advocates on issues relating to media and technology. Mr. Wood
    leads the organization's policy and legal efforts.
        We welcome our witnesses and thank them for appearing
    today.
        We will begin by swearing you in. Would you please rise and
    raise your right hand. Do you swear or affirm under penalty of
    perjury that the testimony you are about to give is true and
    correct to the best of your knowledge, information, and belief
    so help you God?
        Let the record reflect that the witnesses have answered in
    the affirmative.
        Thank you and you can be seated.
        Please know that your written testimony will be entered
    into the record in its entirety. Accordingly, we ask you to
    summarize your testimony in 5 minutes.
        Dr. Ezrielev, you may begin.

                       STATEMENT OF JAY EZRIELEV

        Mr. Ezrielev. Mr. Chair, the Members of the Committee,
    thank you for the opportunity to testify on competition and
    consumer choice and digital streaming. I am Jay Ezrielev,
    founder of the economic consulting firm, Elevecon. I'm also an
    adjunct Professor at Antonin Scalia Law School at George Mason
    University. From 2018-2020, I worked at the FTC as the economic
    adviser to Chair Joseph Simons.
        Digital streaming has revolutionized how we consume video
    content. It has driven innovation in both content creation and
    distribution, which benefits consumers. It is now the most
    popular way we consume video content.
        We now have two potential Blockbuster merger deals in
    digital streaming with both Netflix and Paramount seeking to
    acquire Warner Brothers. These deals have the potential to
    reshape the competitive landscape in digital streaming. There
    is an understandable concern about these deals, what these
    deals will mean for streaming and content creation.
        Will we continue to have innovation and new compelling
    content delivered via digital streaming. The two potential
    deals will face antitrust merger review, most likely by DOJ.
    Will this review make sure that we continue to have the
    benefits of digital streaming competition?
        The two deals come at a pivotal time for antitrust.
    Antitrust enforcement agencies have been shifting the focus of
    enforcement from the core focus of harm to competition to
    pursuing broader policy goals. This shift began under the Biden
    Administration with the antitrust enforcement agencies pursuing
    a broader policy agenda, such as combating unfair treatment of
    workers and seeking to diminish corporate power.
        This is a troubling development for antitrust. Deviating
    from the core antitrust principles will diminish antitrust as a
    tool for preventing harm to competition. Expanding antitrust
    beyond this core principle replaces efficient market function
    with enforcers' views of what is fair and equitable. It chills
    entrepreneurship by supplanting an entrepreneur's judgment
    about the best way to allocate capital. It is this
    entrepreneurship that has brought us enormous innovation and
    prosperity.
        While it's still early days, antitrust enforcement agencies
    under the current administration are continuing to apply a
    broad scope of antitrust enforcement. Even more troubling,
    States are increasingly pursuing their own antitrust agendas
    beyond preventing harm to competition.
        In reviewing the potential Netflix and Paramount deals,
    antitrust enforcement should focus on the core antitrust goal
    of preventing harm to competition. The enforcers should not be
    picking which of the two deals should go through based on what
    they think will deliver the best outcome for consumers. This
    choice is for Warner Brothers Discovery shareholders.
        The enforcers should also not use their leverage to extract
    a settlement that advances a policy agenda. The focus should be
    strictly on preventing harm to competition.
        I don't know if there is a compelling antitrust case
    against either of the deals. However, I would be highly
    skeptical of an enforcement case based entirely on a structural
    presumption, or a presumption of substantial lessening of
    competition based on an increase in market concentration in the
    relevant market. Such an increase in market concentration
    should be a starting point for determining whether to move
    further in the investigation. An increase in market
    concentration is not by itself a reliable indicator of harm to
    competition.
        Most importantly, let's keep antitrust focused on
    preventing harm to competition and not on advancing a political
    agenda.
        [The prepared statement of Mr. Ezrielev follows:]

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        Mr. Fitzgerald. Thank you, Doctor. The doctor yields back.
    Ms. Melugin, you may now begin.

                      STATEMENT OF JESSICA MELUGIN

        Ms. Melugin. Chairman Fitzgerald, Ranking Member Nadler,
    and the distinguished Members of the Subcommittee, thank you
    for inviting me to testify. My name is Jessica Melugin. My work
    focuses on technology and antitrust at the Competitive
    Enterprise Institute, a nonpartisan public policy organization.
    I am also an antitrust and competition fellow at the Innovators
    Network Foundation.
        It's sometimes said that history does not repeat itself,
    but it often rhymes. Certainly, there is a familiar tone in
    today's conversation around the merits of antitrust
    intervention in digital streaming markets to what we've heard
    before in past calls to intervene in entertainment mergers.
        In 2005, after what The Wall Street Journal then described
    as, quote, ``The not so gentle prodding of Federal antitrust
    authorities,'' the movie rental chain Blockbuster dropped its
    bid to purchase rental chain rival Hollywood Entertainment.
    Defenders of the merger pointed to the emerging competitive
    threat of a then up-and-comer who had signed up three million
    subscribers to rent DVDs through the mail. That disruptor was,
    of course, Netflix.
        While regulators fretted about the combined market power of
    two brick-and-mortar DVD rental chains, the market was busy
    shifting the paradigm.
        An increasingly widespread internet soon disrupted
    traditional models of distribution once again. Netflix was
    adept enough to navigate that transition from the post office
    to telecom, and the company now finds itself more directly
    involved in the conversation around preserving competition in
    the entertainment industry.
        While the details of these separate cases have changed, the
    lessons of regulatory restraint remain the same. Just as the
    Federal Trade Commission could not have anticipated the
    technological shifts that rendered physical DVD rentals nearly
    obsolete, antitrust regulators today still cannot predict what
    might come next. They can, however, observe current market
    dynamism to better understand how allocating economies of scale
    and vertical--allowing economies of scale and vertical
    integration could benefit consumers.
        As digital streaming companies and adjacent market
    participants adjust to a landscape where consumers' time and
    attention are now the most important remaining scarcities,
    regulators will likely evaluate their attempts to merge, adapt,
    and compete. This process should follow well-established
    methodologies, using economic evidence to determine the
    relevant market and possible anticompetitive effects, while
    equally assessing the potential proconsumer consequences.
        Determining the proper relevant market will be the first
    step of any antitrust litigation, but it won't be an easy task
    here. Government efforts to block mergers will likely attempt
    to establish the narrowest possible definition of the relevant
    market; namely, subscription video-on-demand exclusively. Does
    that provide an accurate reflection of how consumers view
    possible substitutions? Do broadcast, cable, and satellite
    channels still provide ample competitive pressure to restrain
    prices, encourage output, or maintain quality for merged
    streaming services?
        Looking forward, rather than backward, does YouTube TV or
    even the standard YouTube or TikTok platform sufficiently
    compete with streaming for consumer attention? Social media's
    vast and free-to-the-company content may well constitute a
    sufficient competitive threat to streaming services that
    justifies their need to bolster their holdings of more
    evergreen rewatchable content libraries and the production
    capabilities of traditional studios.
        Perhaps concerns about preserving competition are less
    about horizontal issues between merging streaming services and
    more about the ability of traditional companies to survive and
    compete with social media giants.
        Even the narrowest relevant market will prove challenging
    for regulators to defend in court. If opponents of a merger
    succeed in defining the market as confined exclusively to
    subscription video-on-demand, market shares will be difficult
    to establish.
        Muddying the waters of market share are the widespread
    practices of consumers maintaining many subscriptions
    simultaneously, known a multihoming; bundled subscriptions like
    Disney Plus that might also include ESPN and Hulu--or maybe
    not; third-party bundles offered through mobile carriers,
    internet service providers, or credit cards; Amazon Prime
    subscriptions that might result more from e-commerce interest
    than from streaming entertainment interest; and different
    tiered offerings with or without advertising offered for
    different prices.
        Regardless of the relevant market, the market shares agreed
    on, courts will then be required to evaluate the competitive
    effects of the merger. Proposed mergers may hold the promise of
    significant economic efficiency gains and commensurate benefits
    for consumers.
        Even horizontal aspects of mergers, such as those involved
    in Netflix and Warner Brothers Discovery deal may benefit
    consumers. Increased selection, cost savings, and more accurate
    recommendations are all possibilities.
        Regulators must recognize that traditional media companies
    require flexibility to adapt to prevent meeting the same fate
    as the Blockbuster dinosaur. Constraining these entities from
    pursuing such arrangements by pretending the market is static
    will neither benefit consumers nor competition in the long run.
        Thank you for this opportunity.
        [The prepared statement of Ms. Melugin follows:]

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        Mr. Fitzgerald. Thank you, Ms. Melugin. Dr. Yun, you are
    now recognized.

                        STATEMENT OF JOHN M. YUN

        Mr. Yun. Good morning. Thank you, Chair Fitzgerald, Ranking
    Member Nadler, and the distinguished Members of this
    Subcommittee. It's a true honor to be here. My name is John
    Yun, and, obviously, we're here to assess the potential
    combination of Netflix and Warner Brothers and associated
    assets.
        I see three main issues and there are more, but these are
    the three that I'll focus on, but happy to discuss more:
        (1) The consumer-facing combination downstream in the
    streaming service market been Netflix and HBO Max. What's going
    to happen to those prices and the bundles? What's the relevant
    market to assess that competition?
        (2) What happens to HBO Max? Does it remain an independent
    streaming option, or it will be integrated? If so, how?
        (3) What about the upstream assets, the combination of
    Netflix production studio, as well as Warner Brothers Studios?
    What happens to that content library, the content creators,
    that distribution? Is there an incentive to foreclose others
    from access to that previously do have access?
        As I mentioned, these invoke both what we call horizontal
    and vertical issues in antitrust. Horizontal issues are your
    standard issues of competition between competitors. Think Coke
    versus PEPSI, Samsung versus Apple. Those are the same issues
    that we can see both in the streaming market downstream and the
    streaming production market upstream.
        There's also something called a vertical issue, though, and
    that's the possible control of two or more levels of the supply
    chain. Here, the primary concern that I've seen is that Netflix
    now will control WB Studios' assets and distributions and IP
    properties. What does that mean for consumers?
        All of these questions are going to be governed under the
    Clayton Act, Section 7, which is substantial lessening of
    competition or a tendency to create a monopoly, and the courts
    have consistently examined three markers to whether this is
    going to be met or not and that's usually prices, output, and
    innovation. Other objectives have been called on and looked at,
    at times, but these are the three that almost inevitably the
    court's rule examine.
        That being said, let's start with question (1), the
    combination possibly of Netflix and HBO Max. The key question,
    as mentioned previously, will be what is the relevant market in
    which these streaming services compete? Is it limited to just
    other streaming services, like Amazon Prime Video, Apple Plus,
    Peacock, and Paramount Plus? If so, what's the market share? We
    do have debates of whether market shares are good proxies for
    market power, which is what we're really interested in, but the
    courts have been clear, this is what they will look at.
        The combination of Netflix and HBO Max will, according to
    some estimates, and these are just public estimates, can be
    above 30 percent. I'll mention in a moment why that matters.
    There are other sources, though, that put it below 30 percent,
    so it will be a key question of what the real data shows.
        Assuming it does hit the 30 percent or more marker, the
    reason this matters is a 1963 Supreme Court case, Philadelphia
    and National Bank, and it established a structural presumption
    that if you're above that 30 percent, there's a presumption
    that the deal is illegal and harmful to consumers. It doesn't
    mean it is. There is an opportunity by the parties to
    demonstrate that the procompetitive benefits outweigh that
    presumption. It's not an illegal call, but it is a strong
    presumption and relevant for this assessment.
        It's pretty close to 30 percent, the sources I've seen, so
    that does move it a little bit closer to the parties' favor,
    but it is still above that presumption, so it's going to be an
    incentive to the parties. I say that not cynically, but it
    could be the reality that the market is broader than just
    streaming services. It could include YouTube. It could include
    TikTok. It could include cable, satellite, et cetera. That's
    going to be a key question and something that I think I'm happy
    to explore further later.
        In terms of question (2), will HBO Max remain an
    independent service is a concern I've seen publicly and in
    forums, just in preparation for this hearing. An astounding
    statistic that Netflix has shared is that 75 percent of HBO Max
    subscribers are also Netflix subscribers. That makes me sort
    of, based on my economic training, think that this is going to
    be integrated into some type of premium tier. Happy to discuss
    further. That's just a prediction. It's unlikely that HBO Max
    will remain an independent service post-merger.
        Question (3) is the vertical concern, that Netflix's
    control of WB's assets upstream will lead to some type of
    foreclosure of that. For example, Harry Potter was available on
    Peacock even though that's a WB property. Ted Lasso was
    produced by WB Studios for Apple Plus. Will all of that stop
    post-merger? That consideration I think will also be part of
    what the agencies and the courts examine.
        With that, my time is up, so thank you very much.
        [The prepared statement of Mr. Yun follows:]

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        Mr. Fitzgerald. Thank you, Doctor. Mr. Wood, you're now
    recognized for 5 minutes.

                      STATEMENT OF MATTHEW F. WOOD

        Mr. Wood. Chair Fitzgerald, Ranking Member Raskin, Ranking
    Member Nadler, and the distinguished Members, thank you so much
    for inviting me today.
        This hearing is about competition and consumer choice and
    digital streaming, and that means we must talk about the string
    of mega mergers, both past and newly proposed. Runaway
    consolidation eliminates choice. Companies routinely break
    promises and evade merger conditions, and under the Trump
    Administration, these deals pose tremendous danger to free
    expression.
        I must clarify something, though, before I begin, because
    of the companies involved in these mergers talks and confusion
    about our name. My organization is called Free Press Action, a
    republic interest group that works on media tech and telecom
    policy, and for more than 20 years, we've been analyzing these
    markets, opposing harmful mergers, and fighting both government
    censorship and undue corporate control.
        We are not affiliated with The Free Press, which is the
    publication Paramount Skydance purchased last year before
    making its founder the editor-in-chief of CBS news.
        I don't solely practice antitrust law, but since leaving
    corporate firms, I've spent much of my last 16 years opposing
    mergers that enrich executives, bankers, and lawyers at
    everyone else's expense.
        While Paramount is still pursuing Warner Brothers
    Discovery, the winning bid for now is Netflix's $82.7 billion
    deal to buy a company that, as Mr. Nadler noted, is somehow
    always up for sale in deals that amounted to bad industry bets
    and huge debts.
        Netflix is the largest streaming service in the world, with
    more than 300 million subscribers. Warner Brothers HBO Max is
    well over 100 million, third largest in the U.S. by most
    accounts. Paramount is likely the fifth largest streamer in the
    U.S., and that combo, of course, would couple two of the big
    five Hollywood studios, impacting the market for theatrical
    releases, movies, and TV.
        Both potential mergers could severely harm the viewing
    public, creative industry workers, journalists, movie theaters
    that depend on studio content, and their surrounding Main-
    Street businesses in your districts, too. We fear that either
    deal will reduce competition in streaming and adjacent markets,
    with fewer choices for consumers and fewer opportunities for
    writers, actors, directors, and production technicians. Jobs
    will be lost. Stories will go untold.
        Now, we still need to crunch the numbers for an array of
    markets and metrics. We'll listen critically to claims about
    supposed merger benefits, and we'll ask whether there is
    sufficient competition left to ensure that the billions saved
    in promised synergies are passed along, not pocketed.
        The job for antitrust enforcers is clear. They must engage
    in careful product market analysis to determine if these
    mergers violate the law and whether they promise any real
    efficiencies, not just speculative assurances, as the case law
    says about alleged benefits to the public.
        Either Netflix or Paramount buying Warner Brothers could be
    presumptively illegal under DOJ's merger guidelines. Members of
    this Subcommittee and others in Congress have suggested so on a
    bipartisan basis. Section 7 of the Clayton Act prohibits any
    merger that would, quote, ``substantially lessen competition or
    tend to create a monopoly in any line of commerce.'' That is
    clearly a risk here.
        In our view, either deal likely places far too much power
    in too few hands over what Americans watch and where they get
    their news. The numbers for that news component are dwarfed by
    the dollars thrown at the streaming side in studio catalogs,
    but in addition to HBO, Warner Brothers, of course, owns CNN
    and other cable channels. Netflix doesn't want those.
    Paramount's Ellison family desperately does.
        We're all too familiar with claims that media giants need
    to merge to continue producing news. Their trickle-down notion
    is that more money for shareholders means more investment in
    news or content creation, but as history shows, companies merge
    to save money, not spend it. Every merger obliterates jobs.
    Post-merger companies will reduce output and raise prices
    whenever they can, and having fewer voices make censorship
    easier with fewer corporate gatekeepers to lean on.
        Even more dangerous than the notion that mergers can save
    the news is the way this President has weaponized the merger
    review process. In conjunction with other threats made in plain
    sight, his agencies have used deal approvals to win favors. The
    FCC has blessed mergers moments after deal proponents promised
    to follow the President's demands to end diversity policies.
    They've capitulated on chilling requests to reshape their
    newsrooms.
        The merger that spun Paramount Skydance, as Mr. Raskin has
    said, was graced by an FCC investigation and a multimillion-
    dollar settlement of a specious lawsuit over editing choices in
    an interview with then Vice-President Harris. Paramount
    installed a former Trump Ambassador as a bias monitor and
    recently spiked that 60 Minutes investigation into Trump
    Administration wrongdoing.
        Now, Paramount Skydance's CEO promises, as Mr. Nadler says,
    to, quote, ``make sweeping changes to CNN if he takes it
    over.'' Tilting a merger review process to facilitate that
    outcome should be unthinkable under the First Amendment.
        Should a President use merger reviews to gain political
    outcomes he wants? Some may think it depends on which party
    holds the White House, but that answer abdicates the antitrust
    oversight this Subcommittee conducts and the antitrust laws
    enforcers must apply.
        Thank you and I look forward to your questions.
        [The prepared statement of Mr. Wood follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Fitzgerald. Thank you very much. We will now proceed
    under the 5-minute rule with questions, and I recognize the
    gentleman from California, Mr. Issa.
        Mr. Issa. Thank you, Mr. Chair. Today, we're going to speak
    about disproportionately the Warner Brothers acquisition,
    needless to say. I could begin this by talking about the
    political differences that have been alleged in the two buyers
    and the seller. I could, of course, continue to talk about the
    last administration that never found a merger that they could
    accept and blocked many even when overthrown repeatedly by the
    courts. I could but I won't because, in fact, this is an
    antitrust hearing, and I would like to focus on that. I
    admonish all our witnesses in their answers to get off the
    politics and get on to the specifics of antitrust law.
        I'm going to start with Professor Yun. You mentioned the
    Philadelphia case, but you had some doubts even though Nielsen
    has said that in the streaming, you have a 37 percent market
    share already by Netflix, an additional 6 percent to be
    acquired. Is there any reason that we shouldn't believe that
    this is at least in the ballpark of correct based on one of the
    largest and most historically significant rating organizations?
        Mr. Yun. Thank you, Representative Issa. I appreciate the
    opportunity to speak on this.
        Yes, you're hitting on the key issue, which is the
    reliability of the data that we're using for this presumption,
    and this presumption is very important. Again, we can debate
    whether it should be, but it is standing law today.
        Mr. Issa. Right, but it's standing law to push the scale to
    where there is essentially no further choice and you, more or
    less, close the door.
        Even if, in fact, hypothetically, they're at 29 percent,
    and let's just say that Warner Brothers is 5 percent, you're
    still going over the 30 percent, and few would doubt that
    you're going to end up with that.
        Let me get into a couple of points that you hit. Since
    2011, Netflix has increased price 10 times and a total of 39
    percent increase after adjusting for inflation. Is that, per
    se, a demonstration of market power by any reasonable
    definition?
        Mr. Yun. I can get in the weeds. I would say that almost
    every streaming service has some degree of what we in economics
    call market power. It's not the same as what we think in
    antitrust. What do I mean by that? Earlier, there was a chart
    that was shown that showed--
        Mr. Issa. Well, let me back you up, because I have limited
    time. The reality is that the price and the cost of receiving a
    streaming service on an adjusted basis led by Netflix has gone
    up but not down. From a standpoint of a market, a market that
    is functional, that we would normally think lowers costs as
    volume goes up, would you say that this market shows signs of
    not being functional based on Netflix's consistent lead above
    the rate of inflation?
        Mr. Yun. The reason why I have some concern about the
    premise that this is necessarily a problematic market is simply
    because I saw a chart that showed the highest price increases
    were from Apple Plus, Peacock, and Paramount Plus, who have the
    lowest share in these markets and the lowest--
        Mr. Issa. Aren't they all still losing money?
        Mr. Yun. Yes, no, I--
        Mr. Issa. OK. Isn't there a difference between when you're
    making money and you increase prices beyond inflation and when
    you're losing money and you're trying to minimize your losses?
        Mr. Yun. I think that's fair.
        Mr. Issa. OK. I want to go on quickly. You talked about
    vertical and horizontal, and there's plenty of caselaw,
    including the Supreme Court case that broke up the relationship
    between the studios and the theaters being owned. Aren't we
    again in a situation where if Netflix post-acquisition controls
    a massive library to the exclusion of others, that, in fact, we
    have the same situation again in which--and I'll just use my
    own girds--if you can exclude and you are a must-have and must-
    pay and must-buy, isn't that, in fact, a situation in which, at
    a minimum, everyone would have to have Netflix to have access
    to not just new production but a vast library that, in fact, by
    definition, every child grows up watching?
        Mr. Yun. I think it's a relevant concern. It's something
    they will definitely look at for sure.
        I did look at some statistics that showed what is the
    percentage of Warner Brothers in terms of theater production,
    and it's at that 15-20 percent, so roughly 80 percent is
    outside of that. I think that--
        Mr. Issa. Of course, theater production is important. I was
    talking about libraries, and they are both important.
        Let me just close with one closing question, which is:
    You've looked in the past at the years that this Committee
    oversaw the potential mergers to create competition against
    Verizon by Sprint, AT&T, T-Mobile, ultimately making a decision
    that a relative duopoly was better than one strong player and
    many weak. Aren't we in many ways in that same situation, if
    you could opine on that?
        Mr. Yun. It's going to depend on how we define the relevant
    market in terms of what is really constraining Netflix's price.
    Yes, if it's fairly narrow, yes, the consolidation is
    definitely going to be something that's sufficient for probably
    the presumption.
        Mr. Issa. Thank you, Mr. Chair.
        Mr. Fitzgerald. The gentleman yields back. I now recognize
    the Ranking Member from New York, Mr. Nadler.
        Mr. Nadler. Thank you, Mr. Chair. Mr. Wood, supporters of
    large media mergers, often promise innovation, better services,
    and more content. Looking back, did those mergers deliver to
    the public?
        Mr. Wood. In a word, no, I don't think they did, Mr.
    Nadler. You have listed a litany of deals that involve this
    company itself. Warner Brothers is now currently up for sale
    again. I would say with respect to streaming, for example,
    that, yes, there has been innovation. Consumers have benefited
    from some of these technological changes, but it's not because
    of the mergers.
        The merger promises that are made are often paper thin,
    very hard to enforce if they're even real in the first place,
    and companies routinely break those promises because there's
    very little antitrust enforcers can do after the fact to unwind
    a deal. That's a pretty extraordinary remedy. If they promised
    not to fire people or promised not to raise prices and they do,
    there's not much people can do besides wag a finger at them.
        Mr. Nadler. Hollywood unions, such as the Writers Guild,
    are opposing acquisition by either Netflix or Paramount because
    of concerns that consolidation will reduce employment
    compensation and creative opportunities. What happens to
    independent producers and creators when the number of potential
    buyers for their work shrinks?
        Mr. Wood. Yes, so thank you. We've spoken to some of those
    writers. We've spoken to some of those independent producers.
    They're very concerned and rightly so. When the number of
    buyers for their work shrinks, it's not just that there are
    fewer open doors; there are fewer doors at all, so they have
    fewer places they can take their content.
        They also have the loss of competition and diversification
    in the market, fewer smaller independent producers or fewer
    scrappy competitors who are willing to get a chance on
    something different. It tends to homogenize content and, by
    design, reduce the number of outlets and number of choices they
    have.
        Mr. Nadler. What would the effects of these consolidations
    be under the diversity of content that we see today?
        Mr. Wood. Well, thank you. As I was saying, it would be
    less diversity. I don't know if there is a metric we can apply
    to that, but we do see companies in the broadcast space and the
    streaming space and the studio space homogenizing their
    content, making things more so-called mainstream, taking fewer
    risks, needing more money to come back in through the door to
    justify the huge budgets for the few features they put out. It
    tends to reduce price--sorry. It tends to reduce choice and
    increase prices and just to, as you said, reduce diversity and
    the differentiation between the products these companies have
    to put out to compete and survive.
        Mr. Nadler. Reduce the amount of conflicting information
    and opinions given to the public?
        Mr. Wood. Yes. That's something our organization has worked
    on for years. When it comes to the news and competition there,
    the FCC's tests for that are different from antitrust but
    related in many ways. They look for more competition, more
    diversity, and localism.
        We're often told that, well, the only way we can have more
    competition in local news is to have fewer competitors. The
    only way to have more diversity is fewer voices, and the only
    way to have local content is to nationalize everything. We,
    frankly, don't believe those claims, and we've seen them harm
    communities time and again.
        Mr. Nadler. Everything you just said seemed very
    concerning. The way to have diversity is to have fewer voices.
        Mr. Wood. Yes. As my colleagues on the panel have said
    sometimes you're going to have a situation where if a firm is
    failing or can't compete, then a merger might save them and
    preserve that voice. We are very skeptical of those claims
    because in Warner Brothers' case, for example, by last year's
    metrics, they were the second most successful studio. They're
    the third largest streamer in the country.
        The notion that a company simply has to be sold or else the
    shareholders won't make any money, to us, is very questionable.
    I know that the streamers, in general, have not made as much
    money as they'd like and some have lost money.
        There are legitimate questions there about the
    profitability of streaming, but as a going concern in an
    overall business, we just simply are very skeptical of claims
    that these companies need these mergers to survive or thrive.
        Mr. Nadler. Thank you. I understand that Netflix has made
    promises that it would mitigate possible competition concerns.
    In particular, it says that it would continue to sell shows to
    rival streamers. How should these promises be considered in the
    analysis of potential anticompetitive or public policy harms?
        Mr. Wood. If you're asking me, again, yes. As I said a
    moment ago, I think that these promises are very hard to
    enforce, I could imagine a condition in a merger approval if it
    went through. It's just that whatever these companies agree to,
    it's sometimes easier for them to lawyer their way out but not
    even technically break the promise.
        Then, once that promise is broken, as I said, there's very
    little that enforcers can do to unscrambled the egg and put
    things back together and make companies whole who aren't
    getting the benefits of these promises that were made.
        Mr. Nadler. Thank you. Mr. Chair, I have a number of
    unanimous consent requests for the record from a series of
    labor groups coming out against or raising serious concerns
    with the Netflix-Warner Brothers merger.
        Mr. Fitzgerald. Very good. Go ahead.
        Mr. Nadler. Oh.
        Mr. Fitzgerald. Unanimous consent.
        Mr. Nadler. First, is the IDA statement opposing a merger
    involving Warner Brothers Discovery. The DGA statement on
    Warner Brothers Discovery/Netflix. The SAG-AFTRA statement
    regarding proposed Netflix/Warner Brothers transaction. A
    prepared statement for the record of the Writers Guild of
    America West and the Writers Guild of America East. The
    ``Hollywood Teamsters: Warner-Netflix deal is another call for
    alarm for entertainment workers.'' Finally, the Producers Guild
    of America.
        Mr. Fitzgerald. Without objection. The gentleman's time has
    expired. I now recognize the gentleman from Virginia for his
    questions.
        Mr. Cline. Thank you, Mr. Chair. The witnesses for being
    here for a timely hearing on a--at this moment in time with
    this a snapshot of a marketplace in constant change and
    constant motion.
        We recognize that the country operates under free-market
    principles, and businesses should be able to transact as long
    as they don't create clear antitrust problems. Clarity is
    something that is in the eye of the beholder, but I do think,
    in contrast to Mr. Wood's opinion, general skepticism--the
    standard is not general skepticism about whether a company
    needs a merger to survive. That's really not what we're talking
    about here. We're talking about the definition of the relevant
    streaming market and the regulators and how they're defining
    it.
        Ms. Melugin, why don't you have a go as to how you would
    define the relevant streaming market today for antitrust
    purposes, and what single biggest mistake that regulators are
    making when defining it.
        Ms. Melugin. We had a very helpful example recently with
    the decision in the Meta trial, which was seeking to unwind a
    merger, and unfortunately the judge kind of anticipated
    questions like this and said this is just not a market
    definition that they buy. It had excluded too many entities
    that provided real competition to Meta. That the mistake you
    could make here would be the same.
        I'm not privy to the kind of privileged information that
    talks about market shares, or eyeball time spent on streaming,
    but regulators probably will be, and it will be their job to
    make a case that it's not comparing apples to apples in terms
    of finding out who might be a good substitute. It's about what
    consumers feel is a substitute.
        That would include saying it might be apples to oranges
    with some of these streaming services and other variants in
    social media, but would a consumer maybe substitute an apple
    for an orange if they had to, they probably will.
        That goes to a really, as we've all agreed, an incredibly
    important piece of this is what is that market share. If it's
    above that 30 percent threshold, it doesn't mean that it's a
    closed case and its anticompetitive, you still have a court
    that's going to assess what are the competitive tradeoffs here.
        You have a very difficult task if it even just is above
    that 30 percent mark to say there aren't going to be economic
    benefits to consumers here, but if you expanded the market
    definition you might not even get to that 30 percent number. It
    will be for the courts to decide, I suspect.
        Mr. Cline. Dr. Yun, how would you define relevant streaming
    market today, and what is the single biggest issue facing
    regulators and the mistake that they might be making?
        Mr. Yun. Your question hits what I think will be probably
    80 percent of the investigation and the debate between the
    parties and the courts and the agencies.
        It is natural to think it's a streaming market. They're
    probably the closest competitors. As just mentioned, does it
    include other services.
        Let me just share with you, sir, the lines are being
    blurred. Netflix also offers not only on-demand, but also live
    sports, they offer podcasts, and they offer video games.
    YouTube TV, the linear TV that replaces cable, now has on-
    demand. YouTube itself will now carry the Oscars.
        The line is blurring between these, and I say that not
    because it's going to be defined broadly. I say that simply
    because it's hard to cabin these platforms into specific
    categories that we want to do. It will be the job of the
    agency. It's a data question. No one can sit here and say what
    the market will be. It's going to be based off the data.
        Mr. Cline. Under current antitrust law, when does vertical
    integration in media markets pose competitive harm rather than
    generate efficiencies?
        Mr. Yun. That's the key issue. The key question, there are
    other vertical issues, but as I mentioned in my opening
    statement, the key vertical issue is whether Netflix is in
    control of Warner Brothers Studios' IP property and
    distribution rights, does that create the opportunity for them
    to foreclose third parties who previously had access to those
    assets.
        That question is something that is a very detailed one.
    It's going to look at margins at various levels. What is their
    incentive to do so. What is their market share upstream and
    downstream. Are there substitutes for these IP properties.
    These questions have already been asked here at this hearing
    and it is going to be asked by the agencies. Again, we're not
    going to know until we see the data.
        I will say this, though, usually this is fixed through a
    commitment by the parties to offer this content through
    arbitration going forward, 5-10 years typically. This was
    Comcast NBCUniversal, this was AT&T Time Warner. They're going
    to probably do the same here. Studies have shown it has been
    effective in preserving competition. This is done by Dennis
    Carlton, et cetera. These commitments are court-ordered and
    enforced, and I'm guessing Netflix will offer the same.
        Mr. Cline. Thank you. I yield back.
        Mr. Fitzgerald. The gentleman yields back. I now recognize
    the Ranking Member of the Full Committee, Mr. Raskin, again.
        Mr. Raskin. Thank you, Mr. Chair. If Paramount were to
    acquire Warner Brothers, it would put CNN under the same
    ownership as CBS. When the Ellisons, who own Skydance, were
    seeking to acquire Paramount, they made Trump-friendly changes
    in the newsroom, including installing an ombudsman, which news
    staff referred to as a hall monitor for them, and so we can
    only assume the same kind of fate for CNN.
        Mr. Wood, when there is consolidation in the news media,
    how does this affect the freedom of speech and expression in
    the marketplace for ideas generally, and specifically in the
    Trump period given the very specific phenomena that have arisen
    in terms of the review process.
        Mr. Wood. Yes. Thank you for the question, Ranking Member
    Raskin. Your question lays it out well and there really are two
    distinct threats, at least. First, typically speaking, when you
    have fewer competing voices, you have fewer people working to
    get stories, you have fewer risk takers. Reduction of
    competition reduces the number of opportunities to even tell
    different stories.
        In this administration, we've seen not just consolidation
    at large as a problem, it's the merger process itself being
    used, as you detailed so well, as a carrot and basically
    saying, if you don't agree to change your news coverage, then
    we won't approve your deal. That's the thing that should be
    completely out of bounds, but has happened very often with this
    administration.
        Mr. Raskin. What is happening at CBS News under the new
    management?
        Mr. Wood. Well, I am not a media critic, but I can
    certainly see what's happening. I know even yesterday there
    were concerns about the evening news and how it was being used
    to praise the administration rather than to potentially
    criticize its actions.
        It's the litany of changes that you discussed, the pulling
    of the story from 60 Minutes, all the changes to the evening
    news and the way that they are seemingly looking for
    administration approval of their news rather than reporting on
    the government as any journalist would want to do.
        Mr. Raskin. Well, I'm really a stranger to antitrust law. I
    never taught it. I never even took it. I am going to be reading
    some books on it this year in anticipation of maybe a change in
    our political fortunes in the new Congress.
        Is there anything within antitrust law which considers the
    specific First Amendment implications with respect to media
    mergers that makes it a different kind of analysis from other
    business antitrust analysis?
        Mr. Wood. I wouldn't say--I would want to look at that
    myself. I did take it, but it was a while ago now and I've done
    a lot--
        Mr. Raskin. Dr. Yun, you might know.
        Mr. Yun. It's a great question. I would say that generally
    speaking court precedent would say no, they wouldn't exam it.
        Mr. Raskin. It's just treated the same way?
        Mr. Yun. It's output prices and innovation, and First
    Amendment issues would fall.
        Mr. Raskin. OK. I would like to ask all our witnesses, does
    everybody agree that Federal antitrust agencies should be
    subject to intensive congressional oversight? Starting, Dr.
    Wood, with you.
        Mr. Wood. Yes.
        Mr. Raskin. Dr. Yun, do you agree with that.
        Mr. Yun. It seems quite reasonable.
        Mr. Raskin. Yes. Ms. Melugin?
        Ms. Melugin. Yes.
        Mr. Raskin. Yes. Dr. Ezrielev?
        Mr. Ezrielev. Yes.
        Mr. Raskin. Yes. OK. All right. When I raised the question
    of whether corruption was interfering with proper antitrust law
    analysis I was chided by one of my colleagues for ranging far
    afield from the subject.
        If corruption has actually entered, and perhaps some people
    can never see corruption when it comes to Donald Trump, so set
    him aside for a second, if corruption actually entered the
    antitrust review process through money corruption or political
    influence, would that be a problem? Again, I would like to
    maybe ask each of you. Yes, Mr. Wood.
        Mr. Wood. It would definitely be a problem. I wouldn't be
    naive and think that political influences never played a role
    before. What we're seeing so extraordinary in this
    administration is the openness of it, and the use of antitrust
    and merger review, I would say the misuse, to ring out
    conditions from companies who want approval of their deals.
        Mr. Raskin. Yes. Dr. Yun, do you agree?
        Mr. Yun. Yes. I was at the agency 18 years. I'm an
    antitrust purest, it should be based off the staff and their
    recommendation.
        Mr. Raskin. It's an economic analysis. It's not a question
    of whether you can mobilize this lobbyist or this political
    force to your side.
        Mr. Yun. Absolutely.
        Mr. Raskin. Ms. Melugin.
        Ms. Melugin. Yes, I would agree, this should be matters of
    traditional laws established in a bipartisan way over the last
    40 years, the consumer welfare standard and economic analysis,
    no matter who is installed in any given administration.
        Mr. Raskin. OK. Dr. Ezrielev?
        Mr. Ezrielev. Yes, I'm against corruption in the agencies.
        Mr. Raskin. All right. Mr. Wood, let me come back to you.
    Antitrust law did start with the idea of both benefiting the
    consumers, but also benefiting society by having competitive
    forces. Would you just say a word about what consolidation
    means generally for a free society?
        Mr. Wood. Well, your question about antitrust and First
    Amendment concerns is obviously valid and important in the
    media context. There's a marketplace of ideas that has shrunk,
    too. I agree with my colleagues, the market questions are the
    paramount question, although I shouldn't say paramount in this
    case, but we have to be certainly cognizant of the impacts on
    our civic information and democracy being impacted by the loss
    of that source of information.
        Mr. Fitzgerald. The gentleman's time has expired. I now
    recognize the gentleman from Texas.
        Mr. Good. Ms. Melugin, consumers increasingly subscribe to
    multiple streaming services, and recent year's subscription
    costs have gone up significantly. At the same time, most
    streaming services haven't been profitable despite increasing
    subscription costs. Hard to say those words. You struggled,
    too. I get it.
        Where do we go from here, and will subscription costs keep
    rising, will they eventually run out of business due to lack of
    profitability, and how does regulating the current market help
    things for consumers in competition?
        Ms. Melugin. That's a bundle of excellent questions and
    observations that I would simply say that the best way is that
    they're still sorting this out. It's a relatively new advance
    here, the streaming services, and there's going to probably
    need to be some amount of consolidation. There's probably going
    to be some amount of failure.
        Failing in a market system isn't the same as a government-
    imposed failure on these companies or having taxpayers on the
    hook. It's kind of the natural part of creative destruction
    that happens. There might need to be some calling from the
    herd. There might need to be some consolidation for achieving
    economies of scale.
        That even in the different forms of streaming services we
    see now, like Amazon Prime is a fascinating example of one that
    is tied to an e-commerce delivery package, people are trying--
    these companies are trying lots of different approaches to
    become profitable and to give consumers what they want.
        This latest deal that we're talking about today is a lot
    about combining Netflix distribution advantages and expertise
    and recommendations and things like that with very valuable
    library content at Warner Brothers. Will that be successful for
    them and they'll be able to gain more market share if this deal
    is allowed and drop prices, I don't know. It's not about for
    me--my job isn't picking the winners or losers or telling these
    companies how to act. It's saying that these are the sound
    rules of the road in traditional antitrust, and we should stick
    to that whoever we're evaluating.
        Mr. Good. Thank you. Dr. Ezrielev, forgive me if I
    mispronounced your name, in the current market only Netflix has
    been consistently profitable, with HBO and Disney Plus only
    recently turning a profit, while most streaming services
    operate at a loss. Correct me if I'm wrong, too.
        What impact would be preventing a merger between Netflix
    and Warner Brothers, or Paramount, or any other company, have
    on the market, or any of these businesses, and will we ensure
    competition, or will it lead to a situation where companies
    will end up running out of business like Blockbuster?
        Mr. Ezrielev. Thank you for asking that question. There
    were a lot of questions.
        Mr. Good. We're good at that here.
        Mr. Ezrielev. I'll take it one-by-one. It's important to
    let the market sort this out. This market has been very
    successful in generating growth and innovation and new content,
    and at the core of it is that these companies are trying to
    create content that is appealing to consumer.
        At the same time there's been growth in streaming. Just
    because you are losing--earning a negative margin at current
    demand levels, it doesn't mean that's going to continue as
    demand grows. That's been the driving dynamic of this space.
        It is rational for companies to create more and more
    content to gain more consumers for your streaming service so
    that as demand grows, you'll be able to earn higher margins
    later on.
        As far as the impact of this deal, that this is just market
    trying to reallocate capital to meet demand the best it can. In
    terms of Netflix and Warner Brothers, there are complimentary
    assets on both sides. The way you could combine these assets to
    generate even more compelling content, stream content in a more
    efficient way, find consumers, create content that is appealing
    to viewers, this is how you grow the service, and that's going
    to be good for Netflix and Warner Brothers. I think. I don't
    know. The future will tell.
        It's going to be good for the entire industry. We need this
    kind of dynamic competition to drive more innovation, better
    content, better ways of delivering content to viewers, and,
    also, to use data more effectively to reach viewers with
    content that they'll find appealing.
        Mr. Good. Thank you.
        Mr. Fitzgerald. The gentleman yields back. I now recognize
    the gentlewoman from Vermont.
        Ms. Balint. Thank you, Mr. Chair. I'm going to start by
    just doing some level setting. Americans don't like these
    mergers. They don't want a few giant companies controlling what
    they see and what they hear. We want choices. We want more
    choices. We want artistic freedom. We don't want a handful of
    companies deciding the content that we see. I hear this over
    and over again from my constituents.
        When these giant companies merge, things get better for the
    people at the top over and over again. Every single time. Worse
    for the rest of us. I want us to remember that two of the three
    companies we're talking about today exist because of at least
    one previous merger. It wasn't long ago that Paramount,
    Skydance, Warner Brothers, and Discovery were separate
    companies. We need competition. We do not need more
    consolidation.
        Mr. Wood, thanks so much for being here today. Why is it
    that our media landscape right now has become so consolidated?
        Mr. Wood. Thank you for the question, Congresswoman. It's
    just decades now of lax antitrust enforcement. That certainly
    started to turn a corner with the last administration. Even the
    first Trump Administration we did see efforts there to try to
    block AT&T from buying Time Warner.
        There have been some bright spots. There have been some
    mergers that we've opposed that have been stopped, like AT&T
    buying T-Mobile, Comcast buying Time Warner Cable. Those are
    few and far between. There's been this sort of flood of deals
    that have gone through. As you said, ``it always gets better
    for the people in the C-suite, but much less often for their
    customers.''
        Ms. Balint. I agree. I agree with you, too, that it is lax
    antitrust enforcement. You touched on this earlier, who wins,
    who loses when these mega mergers happen? Let's put a finer
    point to it. Who wins?
        Mr. Wood. It's the companies and their shareholders,
    although not always because a lot of these deals have been bad
    bets for them as well. We've talked today about potential
    innovation and efficiencies and competition being improved in
    some sense by merger, and I wouldn't say that's impossible, I
    would just say that's a pretty high bar.
        What you really need is for those efficiencies to be passed
    along to people rather than just pocketed by the companies. You
    need to have remaining competition.
        Ms. Balint. I agree.
        Mr. Wood. Sufficient incentive for them to not just pocket
    those savings, but to actually have to put them back into the
    business and try to keep their customers happy.
        Ms. Balint. I agree. From what we've heard so far,
    Paramount and Netflix have submitted bids that already raise
    significant concerns. We're at the start of what's going to be
    a very long battle about this. Our Committee is not responsible
    at all for deciding which deal, or neither, violates the law.
    That decision is in the hands of the Department of Justice. We
    know that the DOJ has not been unbiased. That is a strong
    concern that many of us on this Committee have.
        At the last meeting of this Subcommittee, Roger Alford, a
    DOJ whistleblower, described the pay-to-play climate at the
    antitrust division. President Trump recently has said he will
    be, quote, ``involved in the Warner Brothers deal.'' What do
    you think he means by that, Mr. Wood, when he says he's going
    to be involved? What is he talking about?
        Mr. Wood. Well, I'm smiling because it sometimes is down to
    which movies he wants to see made, so it can get kind of
    ridiculous. It's also just about the Trump family's own fates
    and fortunes here, and then these political choices. Again,
    it's not that the political choices aren't real, or somehow are
    completely invalid, but the government should not be imposing
    its will on companies. That's a violation of the First
    Amendment, when they're dangling antitrust review and approval
    based on content changes.
        Of course, as we're all saying, this should be a market
    analysis. I agree with my fellow witnesses, that market
    definition is key here, the merger proponents will always try
    to expand that market and say we're not that concentrated,
    opponents of the deal will try to shrink it, those are, again,
    interesting questions, and they're asked in good faith, but
    that doesn't mean that the White House weighing in does
    anything to advance that analysis. It probably just impedes it
    and takes it off track.
        Ms. Balint. Our job essentially here is to be the watchdog,
    to be doing the oversight, to be the eyes and ears of our
    constituents who can't be in this Committee hearing room. I
    urge the Chair of this Committee to take the role of this
    Committee seriously. There is strong evidence that our
    antitrust enforcement system is being corrupted, and we have to
    use our constitutional authority to investigate.
        Monopolies hurt all Americans, and whether it's in meat
    packing, whether it is in firetruck manufacturing, whether it's
    a monopoly of the seed industry, or in this case, if it's in
    the media landscape, we have to be effective watchdogs and not
    just roll over for an administration that is not doing its due
    diligence for the American people.
        With that, Mr. Chair, I have two unanimous consent that I
    bring before the Committee. In relationship to whether further
    consolidation in the industry is going to be a threat to moving
    theaters and theatrical releases, ``Movie Theaters Dread Any
    Warner Bros. Merger, by the Hollywood Reporter.'' The second
    one, ``Gen X Went To Movie Theaters Most Often in 2025,''
    according to New Exhibition Report. Thank you so much, and I
    yield back.
        Mr. Fitzgerald. Without objection.
        Chair Jordan. Mr. Chair.
        Mr. Fitzgerald. The gentlewoman yields back.
        Chair Jordan. If I could, while we're on unanimous consent,
    have the unanimous consent request from the Chief Legal Officer
    of Paramount Skydance Corporation for a statement to be entered
    into the record.
        Mr. Fitzgerald. Without objection. The gentleman from North
    Carolina is now recognized.
        Mr. Harris. Thank you, Mr. Chair. Thank you all to the
    panel for your time and your expertise you've given today.
        Real quickly, Dr. Ezrielev, as the government, if the
    government is going to intervene to stop these mergers, it has
    to prove that the merger is eliminating competition rather than
    creating benefits for consumers.
        Now, you mentioned in your written testimony a phrase that
    caught my attention when you talked about significant
    efficiencies that would counterbalance any harmful effects
    associated with an increase in market concentration.
        What potential efficiencies could you foresee arising from
    the mergers between Warner Brothers, Netflix, or Paramount?
        Mr. Ezrielev. Thank you, Congressman, for that question.
    There are several sources of efficiencies. The most obvious one
    is that this is a vertical deal, so both--that means I'm
    talking about Netflix and Warner Brothers. The same goes for
    Paramount and Warner Brothers. It means that they're both
    creating content and distributing content. By combining the
    distribution channels of both Netflix and Warner Brothers,
    there are more efficient ways of distributing content to
    viewers. Sometimes you could achieve elimination of double
    marginalizations so that you don't charge your affiliate a
    margin so that you're saving costs. That's potentially a cost
    savings.
        Another source of efficiency may be better use of data. One
    of the things that Netflix does very well is recommending shows
    to people who are likely to enjoy those shows, and that
    requires a lot of data analysis. Also, creation of shows that
    are going to appeal to the right audience shows that people are
    going to watch, that's very risky, it requires a lot of data.
        Combining the data of both HBO Max and Netflix, they will
    be able to better understand what viewers want to see. They
    will be better able to market the shows so that the right
    show--the right content is reaching the right viewer. Those are
    two of the bigger ones, but there are probably others.
        Mr. Harris. Very good. Thank you, sir. Ms. Melugin, in your
    written testimony you did mention that today's calls for an
    antitrust intervention in digital streaming markets as similar
    to those of the past. How is this conversation we're having
    today similar to that in 2005 when you specifically talk about
    Blockbuster seeking to purchase its rival, Hollywood
    Entertainment.
        Ms. Melugin. I think it's just a big temptation for all of
    us as human beings, and regulators especially, for whatever
    reason, to take kind of a snapshot of things as they are and
    view them as static and then deal with those problems as they
    see them, but, in fact, of course, we have to remember, and we
    get reminded periodically, it's not static. It's dynamic.
        While the marketplace is out making changes that no
    regulator should be expected to understand there's a certain
    amount of economic data that should and will be evaluated in
    whatever deal ends up happening, that's fair, there's great
    precedent to that.
        There are considerations, like efficiencies offsetting any
    potential competitive harms; that's great. At some point there
    has to be some amount of regulatory humility that also enters
    the conversation that says we can't actually predict to say how
    will Netflix do after this deal. I don't know. They don't know.
    The people who have skin in the game usually make the best
    guess.
        We've heard about merges that weren't successful in the
    market as well. No one can know the future, and you just have
    to keep a little bit of deference to market forces and
    interested parties in your mind as you look at these deals.
        Mr. Harris. Are there any specific mistakes that you might
    reference that regulators made in 2005 that regulators today
    should avoid.
        Ms. Melugin. Not looking at the bigger picture in terms of
    what technologies are going to come online that sort of
    overthrow the whole system. Right. We all used--I sadly am old
    enough to remember renting DVDs at Blockbuster and Hollywood
    Video. Then, when things got really fancy there were those
    boxes at the grocery store. Amazing innovation. Netflix came
    along and we couldn't believe they were doing it through the
    mail. That was wild and we loved that, too.
        There are other factors outside the narrow band of the data
    regulators are going to look at in this that are happening
    outside, but, nevertheless, might be impactful. You have to
    make sure that by intervening in these market deals you're not
    preventing some of that beneficial innovation unknowingly.
        Mr. Harris. Thank you. I yield back, Mr. Chair.
        Mr. Fitzgerald. The gentleman yields back. I now recognize
    the gentleman from California.
        Mr. Correa. Thank you, Mr. Chair. I want to welcome our
    speakers today and our witnesses.
        I represent Orange County, California, Southern California.
    My biggest employer in my district is Disney Land with 40,000
    jobs, plus. You can understand the multiplier effect there.
    Tremendous economic activity.
        Southern California, California, the entertainment
    industry, film industry, big sector, and the 4th and 5th
    largest economy in the world. That's our bread-and-butter in
    California, entertainment. Yet, all of you know COVID, AI,
    other factors have really hurt our job picture in the
    entertainment industry. Hollywood especially. Losing a lot of
    jobs.
        A lot of graduates from the local best film schools in the
    country, UCLA, USC, and the other schools, a lot of those
    graduates can't find jobs today. You heard my colleagues today
    presenting letters of concern, opposition to these mergers from
    labor groups. These folks are concerned about their jobs,
    bread-and-butter.
        I love to hear your academics today, your analysis today.
    Great stuff. Back home people are concerned about their jobs.
    Where are they going to feed their families tomorrow. A lot of
    uncertainty.
        I'm going to ask each of every one of you, however you can
    answer, are these mergers going to create jobs? Are they going
    to stem from the current loss of jobs that are happening? Mr.
    Wood.
        Mr. Wood. Thank you, Congressman. We would certainly expect
    them not to stem that loss of jobs and to increase it. I think
    recent--
        Mr. Correa. Dr. Yun.
        Mr. Wood. Have shown that.
        Mr. Yun. I genuinely don't know.
        Mr. Correa. Ms. Melugin?
        Ms. Melugin. I think there is a chance that some jobs will
    be lost, and that some jobs we can't articulate at the
    beginning will be created as well.
        Mr. Correa. Dr. Ezrielev? Please excuse me for
    mispronouncing your name.
        Mr. Ezrielev. I don't know if they will create jobs or lose
    jobs.
        Mr. Correa. You have two of you that are uncertain, for
    sure loss of jobs, and possibly loss of jobs.
        Hollywood, best films in the world. Best entertainment in
    the world. Arguably, yes. Maybe. I don't know. Those
    blockbusters out there, a lot of my constituents worked on
    them.
        Let me ask you again specifically, Netflix, if Netflix wins
    this bidding competition, are they going to create jobs? Mr.
    Wood.
        Mr. Wood. Again, it's hard to predict the future, but when
    they say synergies they mean job cuts. They mean other kinds of
    reductions in spending.
        Mr. Correa. Job cuts. Dr. Yun?
        Mr. Yun. I don't have a prediction.
        Mr. Correa. Ms. Melugin.
        Ms. Melugin. I cannot say for certain.
        Mr. Correa. Dr. Ezrielev.
        Mr. Ezrielev. I don't know if they will create jobs. If
    there is growth in the industry, if there is growth in
    streaming and more content that will create jobs.
        Mr. Correa. In California? In the U.S.? Somewhere else?
        Mr. Ezrielev. I don't know where.
        Mr. Correa. If Paramount wins this bidding competition,
    creating jobs, Mr. Wood?
        Mr. Wood. That's a more classic horizontal merger in the
    studio space, and so, no, again, I would think it would
    decrease jobs.
        Mr. Correa. Dr. Yun?
        Mr. Yun. I don't have a prediction on that, either.
        Mr. Correa. Ms. Melugin.
        Ms. Melugin. It would be my same answer, I'm unsure.
        Mr. Correa. Dr. Ezrielev.
        Mr. Ezrielev. I don't know.
        Mr. Correa. Here we are as Members of Congress debating
    M&A, economic activity in this country, job creation, bread-
    and-butter, and we're still not quite sure what the effects
    will be of this M&A activity, is that what I am hearing today,
    or we're hearing it will create job losses, is that--
        Mr. Wood. Again, Congressman, we can only look to the past,
    we can't predict the future. Mergers are designed to save the
    company's money, and those efficiencies might be real for the
    shareholders, but they--
        Mr. Correa. You begin to understand why we have concerns by
    workers in this area when we don't have answers, and it sounds
    like maybe this is not going to be good.
        Let me turn very quickly, my last 30 seconds, are these
    mergers going to lower the ticket, the amount I will pay
    monthly for entertainment at home? Mr. Wood?
        Mr. Wood. No, again, I don't think so. We've seen that
    prices have gone up historically.
        Mr. Correa. Dr. Yun?
        Mr. Yun. For some users, yes. For some users, maybe not.
        Mr. Correa. Ms. Melugin?
        Ms. Melugin. I agree, it will be probably mixed results.
        Mr. Correa. Mixed. Dr. Ezrielev?
        Mr. Ezrielev. I don't know.
        Mr. Correa. Here we go, we don't know, probably job losses.
    Now, we understand why people on Main Street are concerned.
    Thank you very much. Mr. Chair, I yield.
        Mr. Nadler. Mr. Chair.
        Mr. Fitzgerald. The gentleman yields back.
        Mr. Nadler. I have three UC requests.
        Mr. Fitzgerald. Before I would like to say that I did not
    know that Mr. Correa represented Disney Land, that sounds like
    a future field hearing for this Committee.
        Mr. Correa. Offer accepted, sir.
        Mr. Fitzgerald. Mr. Nadler is recognized.
        Mr. Nadler. Thank you. I ask unanimous consent for a
    statement for the record of the American Economic Liberties
    Project; for an article in Planet Money titled, ``The Warner
    Bros. Curse;'' for an article in the Verge titled, ``There are
    no good outcomes for the Warner Bros. Sale.'' I have one more.
    Finally, I offer a unanimous consent request for an article in
    the Free Press titled, ``A More Perfect Media, Saving America's
    Fourth Estate from Billionaires, Broligarchy and Trump.''
        Mr. Fitzgerald. Without objection. The gentlewoman from
    Wyoming is now recognized for 5 minutes.
        Ms. Hageman. Thank you, Mr. Chair. I want to talk a little
    bit about some definitions before I get into my questions, just
    so that I can understand what your testimony is.
        Streaming services send video data through broadband
    internet to televisions, computers, phones, tablets, and other
    devices.
        Linear streaming services deliver live channels over the
    internet, and are commonly considered as alternatives to cable,
    that would be your YouTube TV, Hulu, Live TV, Sling TV, et
    cetera.
        Then, on-demand streaming services generally provide a
    catalog of shows and movies for consumers to watch without
    waiting for downloads, scheduled air times, or physical copies,
    like DVDs, and that would include Netflix, HBO Max, and Amazon
    Prime.
        Warner Brothers Discovery, the company that owns HBO Max
    streaming services, Warner Brothers Movie and Television
    Production Studios, and linear cable television networks,
    including CNN, is currently up for sale, and at least two
    companies, Netflix and Paramount, are actively competing to buy
    it, looking at a sale of upwards of $100 billion.
        Profession Yun, I would like to start with you, and that
    is, as you noticed in your testimony, an initial challenge that
    antitrust official will need to overcome is how we actually
    define the relevant market in this new streaming world we live
    in.
        Now, can you explain to us why some parties might want this
    definition to more broadly include linear TV and social media
    platforms, and why other parties would want a narrower
    definition, a list just on the streaming?
        Mr. Yun. Yes, it's the classic struggle in antitrust cases.
    Narrow definitions obviously mean higher market shares for the
    merging parties, and that usually is what the challengers of a
    merger want. The agencies will probably challenge this merger
    if they find sufficient evidence that the market is just
    streaming and then they'll go forward.
        The party's incentives clearly is to dilute their market
    share, their influence based off the competitors. They're going
    to want to have a broader market to include, as you mentioned,
    YouTube, YouTube TV, cable television, and satellite. The
    inclusion of YouTube onto the market will probably destroy any
    opportunity for this merger to be blocked because that will
    then mean that consumers have a viable option to move their
    attention to YouTube. If the data is there, then I don't think
    this will be challenged. That is everything in terms of this
    debate.
        Ms. Hageman. OK. Do either the narrower definition or the
    broader definition, which would be better for the consumers?
        Mr. Yun. For me, the consumers care about their options and
    choices, so I would hope that the market definition adopted by
    either the agencies or the parties map to truly what the
    consumers have options over.
        If the data does show that consumers, when they see a
    higher price for Netflix, people leave Netflix. Data
    consistently shows that. Where do they go? Do they go to HBO
    Max, do they go to Amazon Prime Video, or do they move to
    YouTube, social media and other platforms? If the data shows
    that they move to the latter, that to me is a great deal of
    evidence that the merger does not consolidate market power
    because the consumers haven't given them that power.
        Ms. Hageman. OK. Well, then, consolidation of streaming
    services may appeal to consumers who are frustrated with the
    fragmentation of the current market across multiple absent
    platforms requiring different subscriptions.
        Netflix is the original streaming service, and still today
    considered one of the premium on-demand streaming services. It
    is also one of the few that is actually profitable, so far.
        While other platforms are trying to grow and turn profits,
    what are the potential negative effects for consumers by
    allowing the top premium service to acquire another? Mr. Yun?
        Mr. Yun. What are the potential negative consequences.
        Ms. Hageman. Yes.
        Mr. Yun. If I had to predict the negative consequence, it's
    most likely going to be those consumers who have no value for
    HBO Max, yet Netflix will most likely increase the price to
    those consumers to access the platform because it's going to
    integrate that content.
        The winners are most likely HBO Max users today who also
    subscribe to Netflix. I would predict their bundle price would
    be lower. That's what I meant earlier that it will be a mixed
    bag, and it will depend on who's the bigger consumer base.
        Ms. Hageman. OK. Just one last question. Balance is
    obviously needed between preserving competition and responding
    to these fragmentation concerns. Does allowing the market's
    biggest player to acquire another major player appropriately
    strike this balance, or is there a better way? Mr. Yun.
        Mr. Yun. Oh, gosh, it's a great question. I'm just so
    limited to whether this deal violates the law or not, and
    that's kind of my focus. There are counterfactuals that could
    possibly be better.
        Ms. Hageman. OK. Well, thank you. With that, I yield back.
        Mr. Fitzgerald. The gentlewoman yields back. I now
    recognize the gentleman from Illinois for 5 minutes.
        Mr. Garcia. Thank you, Chair Fitzgerald. Everyone agrees
    that the rise in on-demand digital streaming has transformed
    and changed the media and entertainment industry. While the
    industry has been transformed, our goal remains the same,
    enforce antitrust laws, and ensure an open competitive market
    that protects workers, consumers, allows new entrance, promotes
    creativity, and free speech.
        Mr. Wood, thank you for being here today. Netflix and
    Warner Brothers argue that the industry has changed so much
    that the relevant market includes other forms of digital media,
    including social media. Are you skeptical of that definition?
        Mr. Wood. I'm listening, but I am skeptical, yes. As Dr.
    Yun was saying that is really the entire question here in the
    entire ball game. The question is not just will people switch
    to a different source, but will that behavior discipline the
    ability of the merging entities to raise prices or reduce
    output.
        There's a couple different questions. There's lots of
    different metrics. Asking about all those metrics is valid, and
    that's really the job that we need the antitrust enforcers to
    do very carefully.
        Mr. Garcia. Thank you. Another important goal of antitrust
    enforcement is protecting workers from anticompetitive and
    abusive practices.
        Of course, this deal is just the latest in a series of mega
    mergers in the entertainment industry. Every time those
    companies promise to protect workers and every time they betray
    workers.
        After Disney, for example, acquired Fox, 4,000 jobs were
    lost. In the years after the AT&T Time Warner merger, 77,000
    workers were laid off. Since merging with Skydance only months
    ago, Paramount has already laid off 1,000 workers, and promise
    to lay off 1,000 workers more in the coming months.
        Mr. Wood, given this history, are you concerned that
    additional consolidation in this industry will harm workers
    through widespread layoffs, reduce compensation, and other
    anticompetitive practices?
        Mr. Wood. Yes. Thank you, Congressman. We are very
    concerned. As you said, ``that's the track record,'' and that's
    the design of these deals, is to reduce the head count. That's
    how companies make a lot of the money that they can, in
    addition to being able to raise prices when they face less
    competition.
        It was suggested earlier that antitrust should not be
    concerned with labor issues. I don't think that's true. I don't
    know that it historically has been enough, but there are courts
    that agree that labor issues are very much the province of
    antitrust law, and so we hope that the analysis will take that
    into account as well. As it's not exactly the same as a typical
    labor market, maybe, but the creators, the artists who are
    putting these products out there, it's almost a shame to call
    them products, because they are not employees of these
    companies, but they also would face reduced opportunities for
    places to find their work made and put on screen if these
    mergers go through and if the number of films made continues to
    dwindle.
        Mr. Garcia. Thank you. My criticism of the Netflix deal is
    not an endorsement of the offer by Paramount, a company that's
    controlled by Right-wing oligarch Larry Ellison and his son
    David. The Ellisons are already doing Trump's bidding at CBS by
    installing Right-wing ideologues who are swaying the network's
    content in favor of this administration in a very very clear
    way. Now they're telling Trump that if Paramount buys Warner
    Brothers, they'll turn CNN into a Trump news network.
        Mr. Wood, are you concerned about the possibility of
    viewpoint discrimination at CNN if Trump blocks the Netflix
    deal and gives the green light to Paramount?
        Mr. Wood. I think you said it well, Congressman. If the new
    owners of CBS want to install a more Right-leaning newsroom and
    change their viewpoint, that's their prerogative. The problem
    is when they're doing that, not only at the President's
    request, but with the threat that their merger won't be
    approved unless they do so. That's the really chilling element
    here.
        Companies, of course, have a right to change their
    politics, change their coverage, change their newsrooms, but
    when it's not only at the government's request, but under a
    threat from the government of withholding of benefits, or some
    other regulatory action, we've seen this at the FCC many times,
    investigations launch that sort of magically disappeared once
    companies made concessions, and that's the kind of
    interference, not only in the antitrust process, but with the
    First Amendment that gravely concerns us.
        Mr. Garcia. That's the warning about greater consolidation
    in the industry. Thank you. I yield back, Mr. Chair.
        Mr. Fitzgerald. The gentleman yields back. The gentleman
    from New York is recognized for UC requests.
        Mr. Nadler. Thank you, Mr. Chair. Mr. Chair, I ask
    unanimous consent to enter into the record an article from the
    Progressive News Wire entitled, ``Press Freedom Groups Tell
    FCC: Media Consolidation Poses Grave Threat to Independent News
    and Information in the United States.'' Also, ask for unanimous
    consent to enter into the record a prepared statement for the
    record of Cinema United.
        Mr. Fitzgerald. Without objection.
        Mr. Nadler. Thank you, Mr. Chair.
        Mr. Fitzgerald. The Chair of the Full Committee is now
    recognized for 5 minutes.
        Chair Jordan. Thank you, Mr. Chair. Ms. Melugin, it's about
    the consumer, right.
        Ms. Melugin. One hopes so.
        Chair Jordan. Earlier it was said it was an economic
    analysis, it's a market analysis. That analysis is driven by
    the welfare of the consumer. If you go to any other standard,
    you start running into problems. You start saying, oh, it's
    about the content producers, it's about the unions, it's about
    the workers, it's about--if you go anywhere else, you're
    getting problems. Here is the good thing, when you focus on the
    consumer, in the long run it typically benefits the workers,
    the businesses, it benefits everyone, but you have to focus
    there.
        You get anywhere else--you can create a monopoly where they
    hire a bunch more people, pay them huge salaries, but that's
    not good in the long run for the consumer, or, frankly, for the
    country, for the market, for everything else; is that right.
        Ms. Melugin. Yes, I would say that antitrust can't serve
    more than one master, and any time you replace any worthy and
    understandably concerned group it's a special interest, and
    that will displace protecting the interest of consumers.
    There's only one person, and there's only one group that it can
    be focused on, and the great thing about picking consumers is
    that at some point in the economy we're all--
        Chair Jordan. We're all consumers. That's a beauty that's
    standard. When you deviate from that standard, start playing
    games, start picking things, start basing it on anything else,
    I think you run into problems.
        How is this going to shake out? We don't have to predict
    everything, but what's--I heard Dr. Yun talk about how the
    marketplace is going to be defined and all that. How are you
    guys--give us your sense. That's what we all want to know.
    Maybe you said that already. I was in another Committee hearing
    on this Minnesota fraud, so I apologize, but--
        Ms. Melugin. It's a hardy, but a newy. Yes, listen, I agree
    with what's been said here. Getting that market definition set
    is going to be hugely important. That affects what market
    shares we're talking about, and that sets either challengers or
    these companies up for success depending.
        Any deal that happens is going to be reviewed just because
    of the size of it, it's going to be reviewed by U.S. antitrust
    officials, regulators, and then you've heard it all here today,
    what are they going to be looking at.
        Chair Jordan. Who do you think is going to get the burden?
    Again, depends on how they define the market, but who is going
    to have the burden? Is it going to be on the companies, the
    merging parties, is it going to be on the government to show
    this is anticompetitive? That's sort of the fundamental step
    that takes place relatively early on in this process.
        Ms. Melugin. Who knows what will happen, but since I got to
    testify today, I will make the prediction that hopefully we
    have a more expansive market, relevant market definition that
    takes into consideration the behavior of its consumers. Even if
    you didn't--you're really only hitting that 30 percent, so
    hopefully we have a broader view of how consumers actually--
        Chair Jordan. Even under the narrow definition, you're
    close to the threshold, the 30 percent criteria, but under the
    broad definition, no problem. I see the Doctor shaking his
    head. Do you want to weigh in as well.
        Mr. Yun. That's 100 percent accurate.
        Chair Jordan. OK. I get it. Anyone else want to--we're
    going to let the Chair finish up here last, but anything else--
    I'll even go to the Democrat witness, Mr. Wood.
        Mr. Wood. How kind of you, sir. No, as you said, we want to
    focus on the consumer, and whether we focus on other things as
    well--
        Chair Jordan. No, you didn't say--the last round of
    questions you said you've got to focus on the worker.
        Mr. Wood. Well, we talked a lot about the markets, too. I
    said we can focus on the labor impacts as well, and I think
    that--
        Chair Jordan. That's a deviation. That's different. That's
    changing, that's changing the process. In the end, in the long
    run, I don't think that's beneficial. I want to focus on
    workers and make sure they have jobs, too, but you can't do
    that because in the long run it will end up skewing the market.
        You said you weren't wedded to the welfare of the consumer
    standard, I think that's the right standard.
        Mr. Wood. Yes. Not solely to that, but I certainly
    understand your viewpoint, too. What I was going to say, in
    antitrust, too, it's always the government's burden to--
        Chair Jordan. All I'm saying is your viewpoint is going to
    get us in trouble, I believe, going forward. The viewpoint
    focusing on the consumer, as Ms. Melugin pointed out, because
    we're all consumers, is the safest, best, tried and true
    process. OK. I said I'll let you talk, so I'll let you talk
    now.
        Mr. Wood. I was going to say, it's the government's burden,
    but as Dr. Yun explained earlier, there is a presumption of
    illegality when the concentration levels hit a certain level.
        To answer your question, it's not going to be the company's
    burden to get this through. It's the government's burden to
    make that case.
        Chair Jordan. That's my read.
        Mr. Wood. How they make that case will depend greatly on
    how we draw those market barriers, and we have concerns about
    competition here, for sure, but that work is yet to be done.
        Chair Jordan. Doctor, you get the last 33 seconds.
        Mr. Ezrielev. That if we focus on the most narrowest
    market, which is the subscription video on-demand market, the
    concentration level there, even though it's likely more than 30
    percent, the market concentration in that market is not
    particularly high, anyway.
        The 30 percent Philadelphia National Bank threshold has
    zero basis in economics. It's more seen as a necessary
    condition and as a sufficient condition. Even under that narrow
    market definition, I don't know if this is a slam dunk, but
    there are lots and lots of problems with that narrow market
    definition.
        By definition, it's a relevant market, so whoever defines
    that market that says everything else is irrelevant, and that
    would include YouTube, and that's just--and others, and that's
    just not the case.
        Chair Jordan. Chair, thank you for this important hearing,
    and I yield back.
        Mr. Fitzgerald. The Chair yields back. I just wanted to
    wrap up, I guess I'll recognize myself for 5 minutes, but what
    it comes down to is, and what we've heard a little bit today is
    let's actually think about how real people actually make the
    decisions on what they're going to use as their entertainment
    value.
        If somebody now says that--it seems like one of the hotter
    shows right now is Landman, so if your neighbor or your friend
    says, hey, have you seen the latest episode of Landman, the
    first thing you're going to think is, I don't know because
    what's it on, what's it being streamed on--and then the family
    makes the decision as to, yes, we're going to sign up for
    Paramount Plus because we don't have it right now, but I do
    want to watch Landman. OK.
        Then, you have the sports issue, which is you have NFL
    teams right now that are on five different streaming venues, so
    the level of frustration I hear from the constituents back in
    the 5th District is why are the Packers on Peacock three times
    this year.
        I don't know if the mergers necessarily change that,
    because no one is shopping for the actual network. What they're
    doing is they're shopping for the content. Right.
        From my perspective, the last administration really did not
    look favorably on mergers. Right. Every merger was suspect
    right out of the gate, and what we found was that's not always
    a bad thing. It depends on the market, it depends on the
    content, and it depends on how it's being delivered, and that
    was underscored again today.
        I just want to thank the witnesses for participating today.
    We do have a couple of unanimous consents. An article published
    in The Wall Street Journal authored by myself titled, ``A
    Merger Could Bring Better Streaming.'' The Ranking Member
    should have offered that one on my behalf. An article published
    in Townhall titled, ``Netflix-Warner Bros. Deal is Free
    Market.'' An article published in Townhall title, ``A Netflix-
    Warner Bros. Deal Puts America First.'' Without objection,
    those will be added.
        We thank everybody for participating today, and certainly
    want to wrap up with not only thanking everyone for being here,
    but just hang on 1 second, without objection, all Members will
    have five legislative days to submit additional written
    questions for the witnesses, and additional materials for the
    record. Without objection, the hearing is adjourned.
        [Whereupon, at 11:56 a.m., the Subcommittee was adjourned.]

        All materials submitted for the record by Members of the
    Subcommittee on the Administrative State, Regulatory Reform,
    and Antitrust can be found at: https://docs.house.gov/
    Committee/Calendar/ByEvent.aspx?EventID=118797.

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