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Amazon-MGM merger under scrutiny as FTC reportedly launches investigation

President Biden tasked the agency Friday with making sure major tech companies' mergers received enough attention from regulators.

A phone displays the MGM lion logo. Behind the phone is a larger, blurred out Amazon sign.

An FTC investigation of Amazon's acquisition of MGM will reportedly run parallel to another FTC investigation that looks at competitive practices on the company's e-commerce platform.

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It looks like Amazon's effort to add MGM's movie and TV studio to its business will undergo scrutiny from federal regulators. The Federal Trade Commission launched an investigation into the merger Friday, according to a report from The Information. The investigation would look for any illegal competitive advantage the merger could give to Amazon.

The reported investigation comes as Amazon faces increasing regulatory scrutiny, including investigations into potential anticompetitive practices in other areas of its business. The FTC is undertaking a separate investigation into Amazon, which the Information reported will focus on whether the company illegally favors its own products over those of other businesses on its e-commerce platform, as well as whether it pressures businesses that list products on the company's marketplace to purchase Amazon's advertising and logistics services.

MGM declined to comment. The FTC and Amazon didn't respond to requests for comment. The merger was announced at the end of May, showing Amazon poised to add beloved classics from MGM's catalog to its streaming service (though not all the titles will be available to stream exclusively on Amazon Prime Video).

Also on Friday, US President Joe Biden signed an executive order that, in part, urged the FTC to investigate mergers thoroughly -- especially acquisitions that involve "dominant internet platforms." In response, FTC chair Lina Khan said in a statement that the agency is reviewing its guidelines for evaluating mergers.

"The current guidelines deserve a hard look to determine whether they are overly permissive," Khan said.

The executive order also urged the FTC to set rules for competition on e-commerce platforms where the owner of the platform also sells its own goods. Federal lawmakers have also introduced recent legislation that would target companies that run online marketplaces, preventing them from favoring their products over those from other businesses. Amazon accounted for about 44% of US e-commerce sales in 2020.