DOJ takes a closer look at Comcast’s deal with Netflix

By Michael McCauley on Monday, April 14th, 2014

When Netflix agreed in February to pay Comcast more money to ensure its movies and TV shows stream more quickly, it raised plenty of eyebrows.  Now it looks like the Department of Justice plans to investigate the potentially anticompetitive nature of the agreement.

The deal was announced after reports that millions of Comcast customers trying to access Netflix faced severely slow streaming speeds and service interruptions.  No explanation was given at the time and other content providers like Amazon Prime Instant Video were unaffected.

The deal raises serious concerns about Comcast’s ability to affect the prices and quality it offers consumers and the troubling precedent that could set for the entire marketplace, especially for content providers with less financial resources as Netflix.  Indeed, Netflix CEO Reed Hastings later remarked that “If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future.”

At the time, Consumers Union sent letters to both the Federal Communications Commission and Department of Justice urging them to investigate whether the deal violated Comcast’s agreement to abide by net neutrality rules under it previous merger with NBC Universal.

Late last week, we received a letter from the Department of Justice indicating that it was aware of the deal between Comcast and Netflix and “will investigate thoroughly any potentially anticompetitive conduct and take whatever action is appropriate under the antitrust laws.”  But the Justice Department said that it would be up to the FCC to determine whether Comcast was abiding by the commitments it made under the merger with NBC Universal.

Comcast’s tremendous gatekeeper power over the content its customers have access to is a critical issue in the debate over its plans to merge with Time Warner Cable.  That’s especially true given the huge assortment of content and television channels it owns through its merger with NBC.  Our concern is that it could use that power to slow down access to content offered by rivals in an effort to favor its own content.

That’s just one of the reasons why this merger is a bad deal for consumers and why it’s so important for citizens to voice their opposition. You can join our campaign by signing our petition today.  Tell the FCC and DOJ to stop this mega merger!

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