Netflix has been hit with a consumer lawsuit following the streaming giant’s US$72 billion acquisition of Warner Bros. Discovery’s studio and streaming business.
The proposed class action was filed by a subscriber of Warner Bros.-owned subscription service, HBO Max, who said the acquisition would reduce video-on-demand competition.
“Netflix has demonstrated repeated willingness to raise subscription prices even while facing competition from full-scale rivals such as WBD,” the lawsuit said.
The lawsuit claimed that the Warner Bros Deal would remove one of Netflix’s biggest rivals, HBO Max, and give Netflix control over Warner Bros' marquee franchises, including Harry Potter, DC Comics and Game of Thrones.
This follows some Congress members questioning the proposal, as well as film groups including the Directors Guild of America and Writers Guild of America.
United States antitrust laws allow consumers to sue over mergers and acquisitions, separate from any federal regulatory agency lawsuit, though such cases face high legal hurdles.
Netflix have spoken out against the lawsuit.
“We believe this suit is meritless and is merely an attempt by the plaintiffs’ bar to leverage all the attention on the deal,” the streaming giant said.
Netflix’s acquisition of the media giant was announced last week after a weeks-long bidding war.
Following the announcement, Paramount Skydance, Netflix’s greatest competition in the bidding war, said it would launch a hostile bid to buy out Warner Bros that would be valued at around US$108 billion.
Warner Bros is not a defendant in the lawsuit.
At the time of writing, Netflix (NASDAQ: NFLX) stocks fell 0.11% to US$96.71.
