A dozen state attorneys general have filed an antitrust lawsuit in a bid to prevent Paramount from acquiring Warner Bros. Discovery (WBD). The complaint, lodged in the US District Court for the Northern District of California, challenges the $110 billion deal that received Department of Justice approval in June. The legal action marks a significant escalation in opposition to the consolidation of the entertainment industry.
States allege Clayton Act violations in film and cable markets
The attorneys general from Arizona, California, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington argue that the merger would harm competition in three specific areas: the distribution of wide-release theatrical films, the distribution of anticipated top-grossing films, and the licensing of basic cable channels to distributors. According to a press release from California AG Rob Bonta, the combined entity would hold a 27 percent share in wide-release theatrical distribution and control three-tenths of likely blockbuster films. In basic cable licensing, Paramount and WBD together would also capture 27 percent of the market, with WBD currently second and Paramount third.
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California AG warns of higher prices and fewer creative opportunities
Rob Bonta stated that the unlawful merger of these two entertainment behemoths would lead to higher prices, lower quality, and less content for film and television, harming movie theaters, basic cable distributors, and ultimately audiences. He emphasized that consolidation reduces opportunities for important stories to be told and limits exposure to diverse perspectives. Bonta also noted the negative impact on entertainment workers, who have already suffered from technological disruption.
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Paramount defends deal as pro-competitive
A Paramount spokesperson dismissed the lawsuit as fundamentally flawed on both facts and law, vowing to vigorously defend the transaction. The company argues that combining with WBD will create a stronger, well-capitalized, creative-first media company better positioned to compete with dominant players like Netflix, Apple, and Amazon. CEO David Ellison has promised at least 30 theatrical releases per year. Paramount also claims consumers will benefit from more choice and better opportunities for creators. As of March 2026, WBD had over 140 million global streaming subscribers, while Paramount+ had 79.6 million. By contrast, Netflix had surpassed 325 million paid members by the end of 2025.
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The lawsuit seeks an injunction to block the closing of the deal. Meanwhile, regulatory reviews are underway in other markets: the European Union has set a provisional decision deadline for July 22 after Paramount offered concessions, and the UK Competition and Markets Authority opened an in-depth investigation in June. The case reflects broader antitrust scrutiny in the media and tech sectors, similar to the scrutiny faced by AI companies such as in the analysis of Anthropic and OpenAI's European dependency. The legal battle could reshape the global entertainment landscape, with precedents rooted in the Clayton Act, the US antitrust law prohibiting anti-competitive practices.
Source: https://www.engadget.com/2213857/states-sue-to-block-paramount-warner-bros-discovery-merger
