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Why Netflix may be immune to Elizabeth Warren



Netflix ( NFLX ) is perhaps the only FAANG company – Facebook ( FB ) Apple ( AAPL ) Amazon ( AMZN ) Netflix ( NFLX ) and Google [19659002] ( GOOGL GOOGLE ) – it would not be subject to Warren's plan to dissolve big tech. Some of Netflix's disadvantages, such as steep streaming competition, are actually advantageous when it comes to political, and possibly regulatory, crackdown on tech.

"So far, Netflix has not received any of the controversies that some of the other FAANG shares have," said Jim Nail, principal analyst at the Forrester research firm. "They do not advertise and do not use data in the way that any of these other companies are."

Netflix probably couldn't be accused of having too much monopoly power, as streaming competition increases with the launch of Apple TV +, Disney + and NBCUniversal & # 39; s Peacock, around the corner.
U.S. Democratic presidential candidate Senator Elizabeth Warren suggested in a blog post in March to break up Google, Facebook and Amazon. Shortly thereafter, in an interview with The Verge, Warren said she thinks Apple should break, too. She said the company should not be able to run the App Store and sell its own apps on it.

In light of Warren's plan to break up big tech, BMO Capital Markets analyst Daniel Salmon made Netflix its top tech share over e-commerce giant Amazon.

"We continue to seek how the legal path can progress for these types of actions, but in the short term we think it is appropriate to move Netflix to the top election and Amazon to number two," Salmon wrote in a note to clients.

"We have less confidence that the subject is a wall of concern for climbing and instead increasingly emptying the basic thesis of Amazon," he wrote. "Netflix, on the other hand, faces little or no regulatory risk."

Warren did not respond to a request for comment Friday.

Warren is not the only one to guarantee a major tech crash. Criticism against major technology companies comes from the left, right and center. The US government is targeting technology companies for issues ranging from breaches of user privacy to monopolistic behavior.
Washington politicians have increasingly focused on antitrust complaints against Amazon, Apple, Facebook and Google. In July, the Ministry of Justice launched a formal antitrust review of the country's largest technology companies. Although these companies were not named by the Department of Justice, the agency indicated that they would look at areas where these companies are dominant players.

The Department of Justice declined to comment on Friday. The Federal Trade Commission said it cannot comment specifically on Netflix.

However, breaking up a large company is a complex process. Even under the most radical vision of some of the progressives that are of concern in this area, antitrust laws do not violate companies because they are large, said David Balto, an antitrust attorney and former police director with the Federal Trade Commission & # 39; s competition agency.

"The antitrust laws would speak to break up companies if they engaged in deep anti-competitive behavior, and if there was no penalty as a result of sales that could really solve the competition problem," Balto said. "It's a universe that is very far away from where we are today. I just don't see a basis for talking about the breakup of any of these companies."

So far, these concerns do not apply to Netflix, said Jim Nail, a Forrester analyst.

"So far it seems like Netflix is ​​good for the consumer. They get a lot of content at a very low price. And a lot of Netflix content probably wouldn't have been produced in the traditional film and TV studio system. So it creates more choices for consumers, and lawmakers and regulators tend to think that more choices for consumers are a good thing, "he said.

"I do not see for whatever reason that they [Netflix] finally got in the cross chairs."


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