Fox is drawing criticism following its acquisition of Roku, a streaming platform and hardware company. In particular, the American Economic Liberties Project – an anti-monopoly advocacy group – has called for an investigation into a $1 million donation made to First Lady Melania Trump during the U.S. Department of Justice’s review of the merger.
According to the American Economic Liberties Project, that donation made in August to the first lady’s “Fostering the Future” initiative to help people who were in the foster care system get college educations is a small amount compared to the $22 billion Fox paid to acquire Roku when the deal was finalized last Friday. It also noted that the DOJ “cleared the deal without filing a complaint or consent decree in court, abandoning its own prior concerns over the deal’s impact on competition in TV and streaming markets.”
Even before the donation, the proposed merger had garnered criticism. Sen. Elizabeth Warren (D-Mass.) and other lawmakers urged the DOJ to “closely scrutinize” the merger.
“We are concerned that, given the Department of Justice’s recent rubber-stamping of deals that may violate antitrust law – and in particular, your apparent role interfering in nonpartisan antitrust enforcement – the (DOJ) may not give this transaction the close review it deserves,” the lawmakers wrote.
In a statement published last Friday, the DOJ said: “Given the facts surrounding the investigation, the Division anticipates that the transaction is not likely to result in harm to competition.”
With the acquisition of Roku, Fox has control over around one in seven U.S. TV advertising dollars, the American Economic Liberties Project noted. Fox is already the owner of Fox News and Fox Sports, as well as the streaming platform Tubi. Beyond the advertising dollars, the merger gives Fox access to Roku’s “extensive viewer data, and powerful new ways to disadvantage rival networks and streamers,” said the American Economic Liberties Project.
“Fox has also already announced planned layoffs to fuel its expected $400 million in annualized cost ‘synergies’ within the next two years,” the advocacy group added.
While Fox agreed to commitments as part of its DOJ review for the Roku acquisition, the group stressed that many of those end after three years, and that they are difficult to enforce. Though President Donald Trump’s DOJ approved the deal, Democrats will take majorities in the House of Representatives and the Senate come January.
“It should set off every alarm bell that the Fox Corporation is giving any money to the First Lady’s foster care initiative during the Justice Department’s review of its Roku deal,” said Lee Hepner, Senior Legal Counsel at the American Economic Liberties Project. “This is part of a documented pattern, where big media corporations curry favor with the administration, via donations and promises of favorable coverage, and then deals get done. How can anyone credibly argue that this Justice Department is still committed to the rule of law?”
Hepner urged the Democratic majority Congress to prioritize rooting out similar transactions.
In its statement about the merger, Fox said that it is “committed to continuing to operate Roku as an open, partner-friendly platform and to the continued ubiquitous distribution of FOX content. On a pro forma basis, the combined company will become the third-largest player in U.S. television by share of viewing, with an attractive mix of FOX’s sports, news, and entertainment content, alongside streaming services Tubi and The Roku Channel. That distribution and engagement scale spans every major viewing environment – broadcast, cable, local and streaming – creating broad and diversified reach that benefits viewers, partners and advertisers.”
