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Following the holidays and the overstimulation that can come with it, local movie theaters may offer a three-hour reprieve for parents and children alike. However, Netflix appears to be the grinch that stole parents’ sanity, threatening to eliminate movie theaters with its latest move to acquire Warner Bros Discovery’s (WBD) studio and streaming businesses. The $82.7 billion Netflix/Warner Brothers deal was announced in early December 2025 after a weeks-long bidding war. The Netflix deal would give the world’s biggest streaming service ownership of a rival that claims to have nearly 130 million streaming subscribers.[1]

Almost immediately following the announcement, Netflix was named in a consumer lawsuit seeking to block the merger.

Consumer Opposition

U.S. federal antitrust laws allow consumers to sue over mergers and acquisitions. On December 8, 2025, an HBO Max subscriber, Michelle Fendelander, filed a class-action lawsuit against Netflix claiming that the proposed Netflix/Warner Bros. acquisition would reduce competition in the U.S. video-on-demand market. In the complaint, Fendelander, a resident of Las Vegas and subscriber to WBD’s HBO Max, claims she and other consumers “will bear the brunt of this decreased competition, paying increased prices and receiving degraded and diminished services for their money.” Fendelander v. Netflix, Inc., No. 5:25-cv-10521 (N.D. Cal.)

The complaint also says that if WBD is removed as an independent competitor, “Netflix would face less pressure to maintain affordable pricing or high-quality content.” Fendelander seeks to represent a class of HBO Max subscribers, including individuals and businesses. The suit alleges the merger, valued at $82.7 billion, would violate Section 7 of the Clayton Act by substantially reducing competition in the U.S. subscription video-on-demand (SVOD) market. Fendelander v. Netflix, Inc., No. 5:25-cv-10521 (N.D. Cal.).

Industry Opposition

Netflix’s potential acquisition of Warner Bros. Discovery also sparked a backlash concerning the potential harm to movie theaters. Cinema United, a trade organization representing movie theater owners, called the acquisition an “unprecedented threat to the global exhibition business.” The group claims it will harm everything from the “biggest circuits to one-screen independents in small towns.”[2] A cohort of anonymous industry executives wrote to Congress expressing concern Netflix would “destroy” the movie theater economy if it diminishes how long Warner Bros. movies spend in theaters.[3]

More recently, Paramount Skydance Corp. made a hostile bid for Warner Bros. Discovery.[4] Warner Bros. rejected Paramount’s offer in favor of completing the merger with Netflix.

Department of Justice Investigation

Both Netflix and Paramount deals face antitrust scrutiny in U.S. and Europe and are under review by the U.S. Department of Justice.[5] U.S. antitrust law requires companies making cash tender offers to go through the regulatory approval process. As part of the DOJ investigation, Justice Department lawyers will analyze documents and interview industry participants to determine whether the merger will harm competition.[6]

The Takeaway

The Netflix/Warner Bros. Discovery deal has faced criticism that extends from Hollywood to Washington, D.C. Lawmakers from both parties condemned the merger, which is an important factor for antitrust investigators when scrutinizing a merger.[7]

[1] Harshita Mary Varghese, Aditya Soni and Dawn Chmielewski, Netflix to Buy Warner Bros. Discovery’s Studios, streaming unit for $72 billion. Reuters. BLOG (Dec. 5, 2025, 12:43 pm) https://www.reuters.com/legal/transactional/netflix-agrees-buy-warner-bros-discoverys-studios-streaming-division-2025-12-05/. Last accessed 1/13/2026.

[2] Conor Murrary, What Does Netflix’s Planned Acquisition of Warner Bros. Mean for Theaters and Titles Like HBO, CNN? Forbes Business. BLOG (Dec. 5, 2025, 10:51 am) https://www.forbes.com/sites/conormurray/2025/12/05/what-does-netflixs-planned-acquisition-of-warner-bros-mean-for-theaters-and-titles-like-hbo-cnn/. Last accessed 1/13/2026.

[3] Id.

[4] US Justice dept digs in on the dueling takeover bids for Warner Bros. Bloomberg. Blog (Jan 8, 2026, 7:16 am). https://www.moneycontrol.com/world/us-justice-dept-digs-in-on-the-dueling-takeover-bids-for-warner-bros-article-13762338.html/amp. Last accessed 1/13/2026.

[5] Id.

[6] Id.

[7] Id.