California and Paramount Skydance are reportedly finalizing a settlement that permits the entertainment giant to complete its $111 billion acquisition of Warner Bros. Discovery. The agreement, expected to be made public later today, has already sparked backlash from Democratic lawmakers and media advocacy groups.
Lina Khan, who served as chair of the Federal Trade Commission during the Biden administration, criticized the potential resolution. Writing yesterday, Khan stated that the merger appears “facially illegal” and argued that the state attorney general’s lawsuit challenging the deal is strong. She expressed concern that settling for behavioral remedies—meaning the companies would proceed under various promises rather than blocking the deal—could prove ineffective.
“Behavioral remedies routinely fail, and the stakes here are particularly high given that a strong democracy requires open markets for sound journalism and creative expression,” Khan wrote.
The path to settlement cleared after four states initially opposed the terms outlined with California agreed to move forward. According to a Bloomberg report citing sources familiar with the matter, settlement talks concluded over the weekend, resolving objections from those jurisdictions that had previously stalled the agreement.
Lina Khan is right to be skeptical. History shows these remedies rarely work. Another mega-merger shouldn’t proceed without serious scrutiny.
Wait, so four states objected but California moved forward? How does one state effectively override the concerns of four others like this?
It is deeply concerning that behavioral promises replace actual competition laws. Democracy needs open markets, not just corporate handshakes.