Amazon’s Planned Purchase of MGM Faces FTC Scrutiny

Companies doing sizable mergers have to submit their deals for government antitrust review. The FTC shares antitrust authority with the Justice Department, and the two agencies split up the work of reviewing proposed deals. The department has recently reviewed transactions involving video content, including Disney’s acquisition of 21st Century Fox and

AT&T Inc.’s

acquisition of Time Warner, a deal the department unsuccessfully attempted to block in court.

During recent interagency negotiations, the FTC secured the right to review the Amazon-MGM deal, the people familiar with the matter said. The FTC pushed for jurisdiction over the merger review because it already has an open, wide-ranging antitrust investigation into Amazon’s business practices, the people said.

The FTC and the Justice Department previously agreed to divide up investigations of four leading tech giants’ conduct, with the department taking

Apple Inc.

and

Alphabet Inc.’s

Google, while the FTC took

Facebook Inc.

and Amazon.

An Amazon spokesman had no immediate comment. An FTC spokeswoman declined to comment.

The MGM review could present an early test for new FTC Chairwoman

Lina Khan,

who made her name in antitrust circles in large part by criticizing Amazon. She wrote a widely read law-review article while at Yale Law School that argued U.S. antitrust law has failed to restrain the online retailer.

Ms. Khan more broadly has argued that antitrust enforcement needs far-reaching changes to better restrain dominant companies. She won Senate confirmation last week to be an FTC commissioner, and President

Biden

then immediately designated her as chairwoman.

Amazon is a growing producer of its own video content and has become an aggressive buyer of sports rights, including those for the National Football League. But it still has a relatively modest library compared with traditional media giants.

MGM is now one of the smaller studios in Hollywood, meaning the tie-up isn’t necessarily the kind of transaction that in the past would have raised immediate red flags about anticompetitive concentration. But in light of Amazon’s broader marketplace footprint, the addition of MGM could raise concerns about the expansion of the online giant’s platform, which critics in Washington already believe is too powerful.

—Joe Flint contributed to this article.

Write to Brent Kendall at brent.kendall@wsj.com