Netflix’s proposed $72 billion acquisition of Warner Bros Discovery faces significant regulatory hurdles as antitrust experts question the company’s argument that YouTube is its primary competitor. Regulators are expected to scrutinize internal documents, subscriber overlap and market definitions to determine whether the deal would reduce competition in premium streaming. While Netflix argues the merger is essential for competing in the broader attention economy, legal analysts say the Justice Department is unlikely to be persuaded.

Netflix’s attempt to justify the industry’s largest-ever media acquisition on the grounds of YouTube competition has swiftly met with skepticism from antitrust attorneys, raising doubts about whether the company can clear regulatory review. The proposed takeover would fuse Netflix’s global customer base with Warner Bros Discovery’s HBO Max, creating a combined platform with roughly 428 million subscribers. Though Netflix has framed the merger as necessary to compete with YouTube — America’s most-watched streaming distributor — experts say regulators will draw sharp distinctions between the two businesses.

Netflix’s Competitive Framing Runs Into DOJ Reality

Netflix argues viewers have finite daily screen time, which places the company in direct competition with YouTube for attention. That logic is central to its defense: if YouTube is the true market leader, the merger with Warner Bros becomes a strategic necessity rather than an attempt to eliminate a rival. Yet, legal specialists say this framing is unlikely to persuade the Justice Department.

Netflix’s core business revolves around high-budget scripted series and films, a model far removed from YouTube’s economy of user-generated content, music videos, tutorials and influencer-driven programming. Even though YouTube held 12.9% of U.S. streaming viewership in October — versus Netflix’s projected 9% post-merger — regulators will focus less on time-share metrics and more on substitutability. For the DOJ, the question is simple: Would traditional Netflix and HBO Max consumers view YouTube content as a replacement for premium series such as “Stranger Things” or “The Last of Us”? Experts overwhelmingly say no.

Historical Precedent Suggests a Narrow Market Definition

Regulatory history provides Netflix with little comfort. The FTC has repeatedly segmented markets more narrowly than companies would prefer, blocking mergers based on product categories that incumbents themselves recognized internally. The Whole Foods–Wild Oats case and the more recent Tapestry–Capri decision reinforce the agency’s willingness to define markets at fine granularity — “premium natural groceries” in one case, “accessible luxury” in another.

If Netflix’s own internal communications classify its competitive set as subscription-based premium streaming, not ad-supported video platforms, regulators will use that documentation to challenge the company’s narrative. Under recently tightened merger disclosure rules, Netflix will have to turn over these documents much earlier, giving the DOJ additional leverage.

Regulators Will Also Probe Pricing Power and Market Consolidation

Netflix has argued the merger could lower overall prices by enabling bundles for consumers who already subscribe to both services. However, the DOJ is traditionally skeptical of cost-savings claims, particularly when mergers create opportunities to raise prices for users who do not opt into bundled products. Regulators are also expected to examine whether eliminating HBO Max as an independent competitor would meaningfully reduce consumer choice in premium streaming — an issue unrelated to YouTube’s dominance.

Looking Ahead

The coming investigation will hinge on internal definitions, market segmentation and whether regulators accept Netflix’s framing of a broader “attention economy.” If not, the deal could face the same fate as other high-profile mergers that collapsed under scrutiny. For now, the burden is squarely on Netflix to prove that YouTube truly belongs in its competitive universe.