Will the DOJ file suit to block the Netflix-WBD merger by December 31, 2026?

DOJ second request represents the highest level of pre-merger scrutiny under HSR, and the separate civil subpoenas investigating exclusionary conduct suggest DOJ is building a broader case beyond standard merger review. Historical precedent is strongly directional: Comcast-TWC ($42.5B) abandoned, Adobe-Figma ($20B) abandoned, Amazon-iRobot abandoned -- deals facing this level of scrutiny have a poor completion rate. Bipartisan Congressional opposition (Lee + Warren) provides strong political cover for DOJ to file suit rather than negotiate a consent decree.

The DOJ has issued both a second request AND separate civil subpoenas for exclusionary conduct -- this dual-track approach is unusual and suggests the DOJ views Netflix as having market power worth investigating independent of the merger. However, filing suit to block is a specific threshold: the DOJ could alternatively negotiate a consent decree with divestitures (as in Disney-Fox), or the parties could abandon the deal preemptively (as in Comcast-TWC). The resolution criteria specifically resolve NO if the deal is abandoned before DOJ action, which reduces the YES probability since parties may preemptively withdraw.

The base rate from analysis facts shows deals facing DOJ second requests plus Congressional opposition have historically faced aggressive enforcement. However, the specific resolution criteria require DOJ to FILE a civil complaint -- not merely oppose or pressure. In Comcast-TWC, DOJ never filed suit; the parties abandoned under pressure. In Adobe-Figma, the DOJ was preparing to sue but the deal was abandoned first. The investigation timeline (most of the year) suggests a decision point in late 2026, leaving limited window for actual filing before December 31. Netflix legal representative stated no separate monopolization investigation notice received, which slightly tempers the dual-track concern.

The DOJ is clearly building toward a challenge. Second request plus separate exclusionary conduct subpoenas is the DOJ running two parallel investigations -- this is not standard merger review, this is the DOJ treating Netflix as a potential monopolist. Bipartisan opposition from both Lee and Warren is rare and gives DOJ maximum political cover. The 30.7% combined SVOD share, even if contested, exceeds typical DOJ comfort thresholds. The question is whether DOJ files vs the parties abandon first -- I weight filing at ~58% because the $82.7B deal size and Netflix management statements suggest they intend to fight.

Historical precedent cuts both ways. Yes, Comcast-TWC and Adobe-Figma failed under DOJ pressure -- but critically, DOJ never actually filed suit in either case. The parties abandoned preemptively. Disney-Fox, which is the closest comparable in the entertainment space, went through with divestitures via consent decree. The resolution criteria specifically require a filed complaint, not DOJ opposition. If Netflix abandons the deal or agrees to a consent decree, this resolves NO. The market definition debate (Netflix argues 10% of total TV time) gives Netflix a credible defense that could make DOJ hesitant to litigate.

The separate exclusionary conduct subpoenas are the most telling signal. DOJ does not issue civil subpoenas about monopoly power maintenance as part of routine merger review -- this suggests the DOJ sees Netflix as having existing monopoly power, which makes the merger an extension of monopolization rather than merely a concentration concern. Combined with bipartisan Congressional backing, Paramount calling it presumptively unlawful, and the private Fendelander class action, the DOJ has political cover, legal precedent, and third-party support for filing. The 28-39% stock decline suggests the market already prices a high probability of DOJ challenge.

DOJ second request plus separate exclusionary conduct subpoenas is the strongest signal -- this dual-track approach indicates serious intent. Historical precedent shows deals at this scrutiny level rarely complete. But the specific question asks about DOJ filing suit, not deal failure. Many deals fail without DOJ ever filing. Probability moderately above 50%.

The key distinction is between DOJ opposition and DOJ filing suit. In Comcast-TWC, Adobe-Figma, and Amazon-iRobot, deals collapsed without DOJ filing a complaint. The consent decree path (Disney-Fox model) is also available. Netflix may abandon preemptively if DOJ signals intent to block. The bipartisan opposition and dual-track investigation make DOJ challenge likely, but actual filing of a complaint is a higher bar.

The $82.7B deal size makes preemptive abandonment less likely than in smaller deals like Adobe-Figma ($20B) -- Netflix has invested significant capital and political capital. This increases the probability that the DOJ must actually file suit to stop it, rather than the parties abandoning. Combined with the dual-track investigation and bipartisan opposition, I assess filing probability at ~59%.