Netflix quietly a huge winner in Biden’s order targeting big business – The Hollywood Reporter


As pretty much everyone knows, the suits in Washington DC have done it for Big Tech these days. Listen to conversation cocktails on antitrust reform. Or watch the steps in courtrooms where the primary focus is to break them. And now read the executive order signed Friday by President Joe Biden, determined to undermine these behemoths and transfer power from corporate gatekeepers to American workers. Then again, a $ 235 billion company stands to benefit from the decision of Biden – a tech giant who has convinced everyone that he’s not really a tech giant, the member of FAANG never invited to those grill sessions on Capitol Hill where lawmakers use tech executives like hamburger patties. How did Netflix get so lucky?

Netflix is ​​by far the leader in streaming these days. He is also the star that everyone in the entertainment world with a telescope watches longingly. The past few years have brought one burgeoning streaming service after another. Except for success, Hollywood studios convinced themselves they needed scale. And so, we see both vertical integration and horizontal consolidation.

Now through his decreeBiden calls on federal agencies to be tougher on proposed mergers. Very solid and wise reasons exist to block more vigorously and even to unravel mergers. Nonetheless, the question arises: what could be a side effect of putting in place more formidable barriers to large-scale transactions in the entertainment space?

Arguably (and yes, these arguments are almost certain to come up in future legal challenges of blocked mergers), Netflix’s position as a leading dog is becoming more entrenched. If the FTC follows Biden’s advice and withdraws the Trump-era guidelines for vertical mergers, it could hurt Amazon’s prospects of acquiring MGM and turning its Prime service into Netflix’s toughest competitor. (Not this FTC chair Lina khan needs more reasons to stick with Amazon.) And if the DOJ starts reviewing proposed mergers to determine their impact on labor markets, it could have ramifications for WarnerMedia-Discovery or any future partnership that could threaten Netflix’s ability to win the streaming wars.

Netflix won’t care if others find it more difficult to combine forces, and the good news for Biden’s Decree business doesn’t end there.

For years, Netflix has poached the top executive talent of its rivals. So much so that major studios, including Fox and Viacom, have taken the streamer to court for tortiously interfering with the contracts. In response, Netflix argued that these employment agreements are void under a California law that disapproves of non-compete provisions. Netflix has so far been unsuccessful thanks to the legal finding that there is nothing illegal about a fixed-term contract as long as the non-competition does not extend beyond the termination. This finding is under appeal.

Now comes the news that Biden is aiming for non-competition. It remains to be seen whether the FTC really has the power to ban the kinds of contractual arrangements that prevent workers from changing jobs, but development is always blowing back behind Netflix’s sails. And then, who knows ? As Netflix continues to grow aggressively through recruiting, Netflix may have better luck with federal agencies in the Biden era than with California courts.

Still not convinced that the Biden command is very compatible with Netflix?

Well, consider how Biden urges the FCC to restore Obama-era net neutrality rules. Keep in mind that this was a huge political priority for the bandwidth-intensive consumer of Netflix, and although the streamer has been a lot quieter in recent years at the thought of telecommunications limiting its traffic, he surely considers that development is still positive. Plus, if Biden ends up appointing a third FCC commissioner, there’s still a possibility that the independent agency will enact net neutrality rules that favor Netflix by being even stricter than the previous set. For example, banning interconnection charges or shutting down telecommunications data providers like AT&T and Comcast from zero-rated content.

Granted, not everything in Biden’s order will be good for Netflix. For example, the White House encourages the FTC to establish rules on data monitoring. The streamer, who collects a lot of data from users and has been a pioneer on the algorithmic programming front, will need to carefully navigate any future regulations aimed at ensuring data privacy and visibility.

But as far as this executive order is billed as Biden’s big move to take on big business, Netflix should be happy to take it. Almost a decade ago, jurist Tim Wu written with enthusiasm on Netflix’s bold and radical plan for the future. Now that the Netflix era has arrived, as Biden’s aide who serves as the administration’s technology and competition point, he’s doing a lot to keep this going.

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