A group of U.S. and EU lawmakers have issued a joint warning that European regulators will 'closely examine' Paramount's proposed acquisition of Warner Bros. Discovery (WBD), emphasizing that shareholder approval does not guarantee regulatory clearance for the merger [1]. The lawmakers, including three European Parliament members and two Democratic U.S. House representatives, sent a letter to Paramount CEO David Ellison, stating that the European Commission and European Parliament will scrutinize the deal under the EU Merger Regulation, focusing on market definition, market share thresholds, customer substitutability, vertical integration effects, and downstream impacts within the Internal Market [1].
The letter specifically cautioned against public statements suggesting the transaction would face minimal regulatory scrutiny or swift approval, calling such characterizations 'premature' [1]. Despite a preliminary WBD shareholder vote approving the merger last month, the lawmakers stressed that the deal remains subject to comprehensive governmental review and could create new barriers to competition [1]. They warned that, if not fully compliant with authorization processes and legislation, the merger could substantially lessen competition across interconnected markets such as film and television production, content licensing, theatrical distribution, and streaming services, potentially reducing consumer choice and increasing prices [1].
Concerns were also raised about editorial independence, referencing the recent acquisition of 'The Free Press' and the appointment of its co-founder, Bari Weiss, as CBS News' editor-in-chief following Skydance's acquisition of Paramount last year [1]. Paramount did not immediately respond to requests for comment [1].
The warning comes shortly after Paramount's earnings report, in which CEO David Ellison expressed optimism about the deal, stating that 'significant progress' was being made toward closing the acquisition by the end of the third quarter and that the company was 'on track to get this done by September of this year' [1]. The merger would unite major film studios, streaming services, and a portfolio of TV networks including CBS, TNT, and CNN [1].
CONCLUSION
Lawmakers from both the U.S. and EU have signaled that Paramount's proposed acquisition of Warner Bros. Discovery will undergo rigorous regulatory scrutiny, despite shareholder approval and optimistic statements from company leadership. The deal faces significant hurdles related to competition, consumer choice, and editorial independence, which could impact its timeline and ultimate approval.