[Note: The following article, published under my byline at LAW.COM on March 27, 2026, is reprinted with permission from the National Law Journal © 2026 ALM Global Properties, LLC.  All right reserved.]

The collapse of the Netflix–Warner Bros. Discovery deal ended its antitrust scrutiny, and the Department of Justice’s Antitrust Division has now turned to reviewing Paramount Skydance’s proposed acquisition of WBD. Notwithstanding a more interventionist enforcement environment and despite its size, this proposed transaction does not likely present a viable antitrust case

At roughly $110 billion in enterprise value, the transaction is substantial but comparable in size to other mergers approved by the DOJ, including the $165 billion AOL-Time Warner merger and the 1999 Exxon-Mobil merger, which would be $110 billion today. Although size can be a factor when it correlates with a large market share, Section 7 of the Clayton Act does not prohibit large deals as such. It prohibits only those acquisitions whose effect “may be substantially to lessen competition, or to tend to create a monopoly.” On this question, the answer respecting this transaction appears straightforward.

Start with market structure. The video marketplace today is fragmented, global, and intensely competitive. Traditional studios compete not only with each other, but with firms like Netflix, Amazon, Apple and YouTube—companies with far greater capital, integrated distribution, and diversified revenue streams. The combined enterprise would not approach market dominance, and case law suggests market share alone is not dispositive; courts require concrete evidence that a transaction is likely to lessen competition in practice, not merely in theory.

In Brown Shoe v. United States (1962), the Supreme Court emphasized that Section 7 demands a “practical, business” assessment of competitive effects—not a mechanical focus on size or structure. That principle has only strengthened over time.

The Supreme Court’s famed United States v. General Dynamics (1974) decision recognized that high market concentration alone isn’t illegal absent evidence of likely harm to competition. The U.S. Court of Appeals for the D.C. Circuit reinforced this approach in United States v. Baker Hughes (1990), holding that market concentration is merely a starting point, not the end of the analysis. And more recently, in United States v. AT&T Inc. (2019), the D.C. Circuit made clear that antitrust law requires proof of likely competitive harm—not conjecture based solely on market structure.

By standard antitrust analysis, it is difficult to see a strong case against this transaction. In the streaming market, subscriber counts and content libraries are fluid, switching costs are low, and competition for attention is constant. Scale alone does not translate into durable market power.

Equally important is the absence of a credible foreclosure theory. This is not a vertical merger combining content with a distribution bottleneck. Paramount does not control broadband networks, cable systems, or other chokepoints that would allow it to disadvantage rivals or raise its rivals’ costs. The combined entity will remain dependent on third-party distribution and licensing relationships in a market it does not control.

Nor does the deal present a plausible monopolization theory. However far enforcers may wish to extend Section 2, courts still require evidence showing the acquisition of durable market power by means of exclusionary conduct. A merged Paramount–WBD would still operate in a field defined by larger and better-capitalized competitors. It would not control the market; it would be trying to keep up in it.

The more compelling story is economic rather than structural. The cost of producing premium content has risen sharply, while revenue models have become less stable. Streaming has disrupted traditional windows, advertising markets are under pressure, and global competition has intensified. The ability to control and reduce costs is critical. This fact suggests that consolidation reflects adaptation rather than entrenchment.

In this regard, efficiencies are not an afterthought under antitrust law. Where a transaction reduces costs, eliminates duplication, or enables output that would not otherwise occur, procompetitive gains result. Sound antitrust analysis takes into account such gains. Combining Paramount and Warner Bros. Discovery offers precisely these outcomes: rationalization of overlapping operations, more efficient capital allocation, and the ability to invest at a scale required by the current market. Importantly, incorporating these efficiency gains in the analysis of whether the transaction is likely to injure competition is consistent with how the enforcement agencies have approached prior transactions in the sector, such as Disney-Fox and WarnerMedia-Discovery.

Here the DOJ will examine specific content markets, licensing practices, and potential spillovers into adjacent sectors. International reviews may impose additional conditions on the transaction. In addition, the political salience of any transaction implicating the ownership of news assets, although not altering the legal standard, can be expected to generate a level of attention beyond standard merger review.

The enforcement agencies bear the burden of showing likely harm to competition. A mere change in industry structure is insufficient to satisfy this burden. Given what courts have required, it is difficult to see how the DOJ could make such a showing in this instance. In addition to the aforementioned efficiency gains, the transaction does not eliminate a uniquely disruptive competitor, does not create control over a critical input, and does not produce a firm with a dominant market share. It combines two challenged players in a market where the most powerful competitors lie outside the traditional studio system.

Antitrust cases turn on evidence, not headlines. Headlines may focus on the size of a transaction, but sound legal analysis rightly rests solely on its competitive impact. Here the evidence points in one direction: a transaction that is unlikely “substantially to lessen competition.”

Theodore A. Gebhard is a former Antitrust Division economist and Federal Trade Commission senior attorney. He also was an antitrust practitioner at the Washington, D.C., office of a large international law firm and now consults on competition policy issues.  See more about Mr. Gebhard here.