Netflix co-CEO Ted Sarandos recently faced intense scrutiny from U.S. senators during a pivotal antitrust subcommittee hearing in Washington D.C., where he passionately defended the streaming giant's ambitious $82.7 billion bid to acquire Warner Bros. and HBO. The proposed merger has sparked considerable debate across Hollywood and among consumers, with concerns centering on Netflix's potential to establish a dominant position in the entertainment industry. Lawmakers from both major parties pressed Sarandos on various facets of the deal, including market definitions, competitive dynamics, and the implications for labor and content creators, ultimately shaping the discourse around media consolidation in the digital era.
Netflix Executive Battles Lawmakers Over Mega-Merger in Capitol Hill Hearing
On February 3, 2026, in a hearing before the U.S. Senate Judiciary Committee Subcommittee on Antitrust, Competition Policy, and Consumer Rights, Netflix co-CEO Ted Sarandos appeared in Washington D.C. to address the company's proposed $82.7 billion acquisition of Warner Bros. and HBO. The atmosphere was charged, with representatives from Warner Bros. Discovery also in attendance, signaling the high stakes of the proceedings. During his testimony, Sarandos presented Netflix as a bulwark against the encroachment of "deep-pocketed tech companies" into the television landscape, notably citing YouTube as a primary competitor. He argued that the competitive arena extends far beyond traditional streaming services to encompass social media, digital games, and other platforms vying for consumer attention. However, this expansive definition of the market was challenged by Senator Mike Lee (R-UT), who contended that YouTube's business model differs significantly from Netflix's, particularly regarding original content production. Sarandos, undeterred, emphasized that if consumers are engaged with YouTube, they are not watching HBO or Netflix, underscoring the "zero-sum game" for audience engagement. The discussion also touched upon Netflix's market share, with Sarandos asserting that the company accounts for roughly 9% of total TV viewing, a figure challenged by Senator Ted Cruz (R-TX) who pointed to Netflix's higher percentage within the streaming-only market. Another key point of contention was the issue of "full residuals" for creators, a sensitive topic for the industry. Senator Josh Hawley (R-Mo.) pressed Sarandos on this, who described the situation as "very complicated," leading to skepticism from the senator. Additionally, Senator Eric Schmitt (R-MO) raised concerns about Netflix's content promoting "DEI and wokeness," suggesting that such content might be divisive. Sarandos responded by stating Netflix caters to a diverse audience, with an even split of conservative and liberal viewers. The hearing also brought to light the absence of Paramount CEO David Ellison, who had met privately with lawmakers regarding a potential hostile bid for Warner Bros. Discovery, raising questions about "political favoritism" as highlighted by Senator Cory Booker.
This hearing vividly illustrates the complex interplay between technological advancement, market dynamics, and regulatory oversight in the entertainment sector. It compels us to consider how we define 'competition' in an increasingly fragmented digital landscape. Is it solely about direct content rivalry, or a broader battle for consumer attention across all forms of media? The debate over market definition is crucial, as it could reshape how antitrust laws are applied to tech and media giants. Furthermore, the discussion around creators' residuals and content diversity highlights the growing tension between corporate strategies and the welfare of creative talent, as well as societal values. As streaming platforms continue to consolidate power, it becomes imperative for policymakers to ensure a level playing field, protect consumer interests, and foster a vibrant, diverse creative ecosystem. This also sparks a larger conversation about the role of government in regulating cultural content and the implications of such oversight on artistic freedom and expression.