Amazon’s world is already enough without MGM

Amazon.com’s  talks to acquire MGM Holdings deserve a critical review. The $1.7 trillion e-commerce giant already has huge clout in what consumers buy. Buying the studio that owns James Bond and Rocky would make it a bigger force in what they watch too. For U.S. competition watchdogs, Amazon’s creep into every facet of its customers’ lives is an invitation to yell “cut.”

In the traditional, narrow view of American antitrust laws, the deal isn’t a major problem. The Information reported on Monday that Amazon was in talks to acquire privately held MGM, which filed for bankruptcy in the wake of the 2008 financial crisis. A deal could be valued around $9 billion. Amazon Studios, which made the latest Borat movie, is still an upstart against behemoths like Comcast’s (CMCSA.O) Universal Pictures and Warner Bros, which AT&T (T.N) agreed this week to hand over to Discovery (DISCA.O). MGM doesn’t even rank among the top 10 studios by box office sales.

But widening the lens reveals reasons for concern. Amazon’s scale and resources, arguably fattened further by state-enforced pandemic lockdowns, would make it an immediate force. It has $42 billion in cash in its coffers; Comcast has $15 billion. Jeff Bezos’s company spent $11 billion in 2020 on content for its streaming video and music services, a more than 40% jump from 2019.

Amazon can also leverage its other businesses. Almost 90% of Amazon’s 200 million-plus Prime members have streamed shows and movies in the past year. Besides Prime Video, it also owns media player Amazon Fire, video-gaming chat service Twitch and other entertainment-related platforms, not to mention its e-commerce site. Meanwhile, MGM has about 4,000 titles in its film library, along with thousands of hours of TV programs.

Amazon is also expanding elsewhere. It launched an online pharmacy last November. It recently opened its first overseas physical retail stores with three Amazon Fresh locations in London, where it also launched a hair salon to test new technology. Amazon Air will have more than 85 planes by the end of 2022. And its cloud business is the top player in the sector.

Regulators have had a history of missing the antitrust curve. Authorities easily cleared Amazon’s nearly $14 billion deal to acquire Whole Foods Market in 2017 because they weren’t direct competitors. Watchdogs can tell Amazon its world is already enough without 007 in its employ. Reuters