CASE STUDY
Antitrust, Monopsony, and Implications for Singapore’s Media Ecosystem
February 2026 | Competition Law & Digital Media Policy
Executive Summary
In February 2026, the United States Department of Justice (DOJ) launched a substantive antitrust investigation into Netflix Inc.’s proposed US$72 billion acquisition of Warner Bros. Discovery Inc. — the largest media transaction in over a decade. The investigation invokes both Section 7 of the Clayton Act (merger review) and Section 2 of the Sherman Act (monopolisation), a dual statutory framing that is highly atypical for merger proceedings and signals that regulators may regard Netflix’s existing conduct as independently unlawful, irrespective of the transaction’s outcome.
This case study analyses the legal, economic, and strategic dimensions of the investigation, with specific attention to monopsony theory, market definition controversies, and the ripple effects anticipated for Singapore’s content industry, regulatory posture, and consumer welfare.
Key Transaction Parameters
Acquirer: Netflix Inc. | Target: Warner Bros. Discovery Inc. | Proposed Consideration: US$72 billion | Regulatory Body: US Department of Justice, Antitrust Division | Statutes Invoked: Clayton Act §7 (merger review) and Sherman Act §2 (monopolisation) | Competing Bidder: Paramount Skydance Corp.
- Background and Transaction Overview
1.1 The Parties
Netflix Inc. is the world’s largest subscription video-on-demand (SVOD) service, with approximately 300 million paid subscribers globally as of early 2026. It spends approximately US$20 billion annually on programming — a figure comparable in scale to Disney and Comcast — split between original productions and licensed content. Critically, many of its most viewed original programmes, including Wednesday and Nobody Wants This, are produced by third-party independent studios, making Netflix simultaneously a buyer and a competitor in the content production market.
Warner Bros. Discovery Inc. is one of the most vertically integrated media conglomerates in the world, encompassing the HBO premium cable and streaming brand, Warner Bros. film studio, CNN, and the Max streaming service. Its acquisition would give Netflix control over one of the most prestigious intellectual property libraries in entertainment history, a major film studio capable of producing theatrical-to-streaming content, and a significant direct competitor in SVOD.
1.2 Strategic Rationale
Netflix’s acquisition logic appears threefold. First, it would eliminate Max as a competing SVOD platform, consolidating Netflix’s subscriber base advantage. Second, it would internalise a major production studio, reducing Netflix’s dependence on third-party creators and stabilising its content supply chain. Third, access to the HBO brand — consistently associated with prestige television — would strengthen Netflix’s competitive positioning against Apple TV+ and Disney+, which have made significant inroads in the premium content segment. - The DOJ Investigation: Legal Framework
2.1 Dual Statutory Invocation
The most analytically significant feature of the DOJ’s investigation is its simultaneous invocation of two distinct antitrust statutes. This dual framing is rare in merger reviews and carries distinct legal consequences.
Statute Application and Significance
Clayton Act § 7 Forward-looking merger review. Asks whether a transaction ‘may substantially lessen competition or tend to create a monopoly.’ The standard antitrust instrument for evaluating whether a proposed deal would harm market structure.
Sherman Act § 2 Ex post monopolisation statute. Targets conduct by a single firm that has acquired or maintained monopoly power through exclusionary means. Typically applied against existing companies (e.g., Google, Live Nation, Visa), not transactions.
Combined Application The DOJ’s decision to invoke both statutes suggests it views Netflix’s pre-existing buyer-side conduct — independently of the merger — as potentially constituting illegal monopolisation. This materially expands the investigation’s scope and duration.
Netflix’s chief legal officer has denied any monopoly power or exclusionary conduct. However, the issuance of a Civil Investigative Demand (CID) — an administrative subpoena — to an independent movie studio confirms that the DOJ is scrutinising Netflix’s bilateral negotiations with content creators directly, not merely the structural effects of the proposed acquisition.
2.2 Monopsony Theory of Harm
The dominant theory of harm underlying the investigation is not monopoly (seller-side market power over consumers) but monopsony: buyer-side market power that harms sellers — in this case, independent filmmakers, production studios, and creators.
Monopsony harm can manifest in several ways in content markets. Netflix’s scale as a buyer may allow it to suppress licensing fees and creative compensation below competitive levels. Its data advantages — derived from its proprietary viewing metrics — may enable it to price content more precisely than creators can negotiate upward. Its ability to offer or withhold global distribution may function as a structural lever that creators cannot easily replicate with alternative buyers.
It is important to note that monopsonistic harm to creators can coexist with consumer benefit from lower subscription prices. Antitrust doctrine has increasingly grappled with this asymmetry, particularly in digital platform markets where the traditional consumer welfare standard may undercount upstream harms to labour and creative industries.
2.3 Market Definition
Netflix’s defence relies heavily on a broad market definition: it cites approximately 9% of total US television viewing as evidence that its market share is insufficient to support monopolisation claims. However, antitrust market definition is not simply about share of total viewing time; it requires identification of a relevant product and geographic market in which competition is constrained.
The DOJ is likely to argue for a narrower market definition — potentially ‘premium subscription streaming distribution in the United States’ or ‘licensing markets for independent film and television content’ — in which Netflix’s share is substantially larger. The Supreme Court’s decision in Ohio v. American Express Co. (2018) has complicated the analysis of multi-sided platforms, but content licensing markets may be treated as distinct from consumer-facing distribution markets, allowing the DOJ to isolate Netflix’s buyer-side power without triggering the two-sided market defence.
- Competitive Dynamics and the Paramount Skydance Variable
The investigation creates a structural asymmetry that benefits Paramount Skydance Corp., the rival bidder for Warner Bros. Discovery. A prolonged DOJ review — which Sherman Act investigations routinely require, given their more complex evidentiary standards relative to merger reviews — delays Netflix’s ability to consummate the transaction and potentially provides Paramount with additional time and negotiating leverage.
Warner Bros. Discovery has set a deadline of 23 February 2026 for Paramount Skydance to submit its ‘best and final’ offer, reportedly at US$31 per share. The political economy of the investigation thus creates an unusual dynamic: governmental investigative rigor, whatever its legal merits, structurally advantages a competing acquirer. This has prompted Netflix’s legal representatives at Skadden Arps to publicly dispute whether a monopolisation investigation is formally underway — a dispute that itself signals the legal stakes involved. - Implications for Singapore
4.1 Singapore as a Regional Hub for Content Acquisition
Singapore occupies a distinctive position in the global media supply chain. It functions as a regional headquarters for several major streaming platforms — Netflix, Disney+, and Amazon Prime Video all maintain significant operations in Singapore — and as a gateway to the broader Southeast Asian content market. A transaction that reshapes global streaming concentration will therefore have direct operational consequences for Singapore-based content acquisition teams, production ventures, and regulatory dialogue.
4.2 Impact on Local and Regional Creators
Singapore’s independent film and television production sector, while smaller in absolute terms than South Korean or Japanese counterparts, has seen meaningful growth through co-production agreements and platform commissioning. Productions such as those developed through the Infocomm Media Development Authority’s (IMDA) Singapore Media Festival co-production initiatives illustrate the sector’s reliance on platform relationships for funding and international distribution.
If the Netflix-Warner Bros. Discovery merger proceeds and Netflix’s monopsony power is confirmed or expanded, Singapore-based independent creators may face a more concentrated buyer landscape. The merger of Netflix’s SVOD dominance with Warner Bros.’ studio capabilities could reduce the number of meaningful acquisition windows for Southeast Asian independent content, particularly if the combined entity prioritises internal production over third-party commissioning.
4.3 Regulatory Considerations: IMDA and Competition Law
Singapore Regulatory Context
Singapore’s primary media regulator is the Infocomm Media Development Authority (IMDA). Competition matters fall under the Competition and Consumer Commission of Singapore (CCCS), which applies the Competition Act 2004. Singapore does not currently mandate pre-merger notification for transactions below certain turnover thresholds, though CCCS has authority to investigate mergers that substantially lessen competition in Singapore markets.
The Netflix-Warner Bros. Discovery merger may not automatically trigger CCCS review if the parties’ Singapore-market turnover falls below applicable thresholds. However, the merger’s structural effects on the global content licensing market — where Singapore-based creators and distributors transact — may generate downstream competitive harms that fall within CCCS’s analytical remit.
Singapore regulators should closely monitor the DOJ’s investigation methodology, particularly its approach to defining content licensing markets and quantifying monopsony harm. These analytical frameworks are directly transferable to CCCS’s own emerging analysis of digital platform markets. Singapore has signalled increasing regulatory ambition in digital markets through the Digital Markets Conduct Code (DMCC) framework discussions, and the DOJ investigation provides a useful doctrinal laboratory.
4.4 Consumer Welfare in Singapore
From a consumer perspective, the merger’s short-term effects on Singapore subscribers are ambiguous. Consolidation of Netflix and Max content libraries could increase the quality of content available on a single platform, reducing the need for multiple subscriptions. However, reduced competition between streaming platforms could support pricing power and reduce incentives for platform innovation.
Singapore’s media consumption patterns — characterised by high smartphone penetration, multilingual content preferences, and a culturally diverse population — mean that competitive streaming markets have provided meaningful variety. A consolidated Netflix-Warner Bros. entity would represent an estimated combined share of Singapore’s premium SVOD market that warrants regulatory attention, even if it does not constitute a formal notification trigger.
4.5 Trade and Diplomatic Dimensions
The US-Singapore Free Trade Agreement (USSFTA) contains provisions relevant to digital trade and intellectual property. While the USSFTA does not specifically address streaming platform consolidation, increased US regulatory scrutiny of major platforms may have indirect implications for the digital trade framework. Singapore’s position as an open economy with strong IP protections makes it a natural observer of US antitrust developments that affect the global creative economy.
More broadly, the DOJ investigation occurs against a backdrop of increasing regulatory divergence between US and EU approaches to digital platform competition — with the EU’s Digital Markets Act imposing ex ante obligations on ‘gatekeeper’ platforms. Singapore, which has studied both frameworks, may find the Netflix investigation informative as it develops its own approach to digital market regulation.
- Critical Analysis
5.1 Strengths of the DOJ’s Approach
The DOJ’s willingness to invoke the Sherman Act in a merger context is legally bold but analytically defensible. If Netflix’s pre-merger conduct — including its negotiating practices with independent studios — already exhibits the hallmarks of exclusionary monopsony, then permitting the merger to proceed without first resolving those conduct concerns would compound the harm. The dual statutory approach preserves the DOJ’s ability to pursue conduct remedies independently of whether it ultimately challenges or clears the merger.
The use of Civil Investigative Demands directed at independent studios is also methodologically sound. Creator-side testimony about negotiating leverage, take-it-or-leave-it offers, and market alternatives is precisely the empirical record needed to establish monopsony power under the rule of reason standard.
5.2 Challenges and Limitations
Netflix’s argument that its programming spend is comparable to Disney and Comcast has limited direct relevance to monopsony claims but does complicate market definition. If multiple large buyers compete for independent content, the structural conditions for monopsony are less clearly established. The DOJ will need to demonstrate not just Netflix’s scale but its ability to act as a price-setter rather than a price-taker in content licensing markets.
The 50% market concentration threshold for monopolisation cases, cited in the article, is also a genuine doctrinal hurdle. Courts have generally required dominant market share before finding §2 violations, and Netflix’s share of total US television viewing (approximately 9%) provides an easy counter-narrative, even if the relevant market is appropriately defined more narrowly.
5.3 Structural Remedies and Precedent
If the DOJ proceeds to challenge the merger, it may seek structural remedies (divestiture of specific assets, such as the Max streaming service or particular studio assets) rather than an outright block. Behavioural remedies — such as content licensing mandates or most-favoured-nation prohibitions — are increasingly disfavoured by US antitrust enforcers, who regard them as difficult to monitor and enforce over time.
The precedent implications are significant. A successful DOJ challenge would be the first major application of monopsony theory in content licensing markets and would establish a framework applicable to subsequent platform mergers — including potential consolidation among streaming services operating in Southeast Asia. - Conclusions and Policy Recommendations
The Netflix-Warner Bros. Discovery investigation represents a significant inflection point in the regulation of digital platform markets. Its dual statutory framing, focus on monopsony rather than monopoly, and broad evidentiary scope signal a DOJ that is prepared to engage with the structural realities of platform economics rather than applying legacy consumer welfare frameworks mechanically.
For Singapore Policymakers
Monitor the DOJ investigation’s market definition methodology closely, particularly its treatment of content licensing markets as distinct from consumer-facing distribution markets.
Engage with CCCS to evaluate whether existing merger notification thresholds adequately capture transactions with significant downstream effects on Singapore-based content creators and distributors.
Consider whether the IMDA’s co-production and content development frameworks should incorporate contingency planning for increased market concentration in global streaming.
Participate in international regulatory dialogue — through forums such as the International Competition Network — to develop coordinated approaches to platform monopsony in creative industries.
For Singapore-Based Content Creators
Diversify platform relationships proactively to reduce dependence on any single buyer’s commissioning decisions.
Engage with industry associations to develop collective negotiating frameworks that could partially offset individual creators’ structural disadvantage relative to large platform buyers.
Monitor the outcome of the DOJ investigation for guidance on the legal limits of platform buyer-side leverage that may inform domestic negotiations.
For Academic and Legal Community
The case provides a rich doctrinal laboratory for examining the application of Sherman Act §2 in non-traditional contexts — specifically, buyer-side power in creative labour markets.
The market definition controversy — broad TV viewing share versus narrow SVOD licensing markets — illustrates the enduring centrality of market definition to antitrust outcomes and warrants further scholarly attention in the context of multi-sided digital platforms.
Singapore scholars and practitioners should contribute comparative analysis of how CCCS and IMDA frameworks might adapt the doctrinal innovations emerging from this investigation to the regional context.
Appendix: Key Actors and Positions
Actor Position / Role
Netflix Inc. Acquirer. Denies monopoly power or exclusionary conduct. Argues market share (9% of US TV viewing) is insufficient to support monopolisation claims.
Warner Bros. Discovery Inc. Target. Declined to comment publicly. Simultaneously negotiating with rival bidder Paramount Skydance.
US Department of Justice Investigating under both Clayton Act §7 and Sherman Act §2. Issued Civil Investigative Demand to independent studio. Scrutinising Netflix’s buyer-side leverage over creators.
Paramount Skydance Corp. Rival bidder. Benefits structurally from extended DOJ review timeline. Has offered approximately US$31 per share.
Skadden Arps (Netflix counsel) Disputes characterisation of investigation as monopolisation inquiry. Claims no formal notice of §2 investigation received.
IMDA (Singapore) Primary media regulator in Singapore. Administers co-production frameworks and content development incentives.
CCCS (Singapore) Competition regulator. Has authority to investigate mergers substantially lessening competition in Singapore markets.