The U.S. Department of Justice issued the following statement today in connection with the closing of the Antitrust Division’s investigation into the proposed acquisition of Roku Inc. (Roku) by FOX Corporation (FOX) (together, the “Parties”).
On June 15, FOX announced its intent to acquire Roku for approximately $22 billion. FOX operates several media companies, including FOX News Media, FOX Entertainment, FOX Television Stations, and Tubi, a free, ad-supported streaming service. Roku sells connected TV devices, televisions, streaming players, and smart home devices and operates a connected TV platform that users can use to access hundreds of streaming applications. Roku also owns and operates a free, ad-supported streaming service, The Roku Channel (TRC).
The Division opened an investigation and issued second requests to FOX and Roku. The Division analyzed whether the proposed merger may harm competition among free, ad-supported streaming providers. The Division also considered whether FOX might use its control of the Roku platform to disadvantage its content rivals post-merger.
The Division concluded that the entry of free, ad-supported streaming providers would be timely, likely, and sufficient to make a substantial risk of harm to competition unlikely. Additionally, the investigation found that, because Roku relies on a broad offering of content from many providers to attract consumers, the merged firm would suffer monetary and reputational harm if it attempted to use the Roku platform to harm FOX’s content rivals. If the merged firm were to degrade the Roku platform, consumers could switch to other connected TV platforms. Given the facts surrounding the investigation, the Division anticipates that the transaction is not likely to result in harm to competition.
Consistent with the Division’s finding that the transaction is unlikely to result in harm to competition, FOX has committed that Roku will remain an open and neutral content partner post-merger. More specifically, FOX has committed to the following:
- FOX will continue carrying non-FOX content on Roku for a period of at least 3 years consistent with historical Roku practice.
- FOX will not discriminate against non-FOX content in search results. For application placement on Roku, FOX will continue to allow users to reconfigure application configurations on the home screen.
- FOX will continue to provide data products to third parties on commercially reasonable terms consistent with Roku’s standard distribution agreement.
- FOX will maintain existing contractual firewall commitments to content partners for competitively sensitive non-FOX content data, including aggregated and non-aggregated data that can be inferred from, or collected through, commercial activities of non-FOX content providers or their uses on Roku products, including click, search, view, and voice data for a period of at least 3 years.
Following this review, the Division decided that its investigation could be closed. The Division will continue to evaluate competition in the industry and may take appropriate action in light of changing facts or circumstances.