Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: EC gives green light to Paramount/Warner Bros. deal, with conditions, (Jul 23, 2026)

By Peter Reap, J.D., LL.M.

The approval is conditional on full compliance with commitments that include termination of Paramount’s stake in UIP, a film distribution joint venture.

The European Commission (EC) has approved the proposed acquisition by Paramount Skydance Corporation (Paramount) of Warner Bros. Discovery (Warner Bros.), subject to full compliance with the commitments offered by Paramount. The commitments include the termination of Paramount’s stake in United International Pictures (UIP), a film distribution joint venture of Paramount and NBC Universal, in the European Economic Area (EEA).The EC’s announcement comes after a flurry of recent activity over the deal between the entertainment giants in the United States, where the deal was given a nod by the Justice Department in June, and earlier this week the federal district court in San Jose granted a Temporary Restraining Order (TRO) halting the merger in the case brought by the State of California and a coalition of 11 other states.

The EC investigation. Paramount and Warner are both active in the production and distribution of theatrical and audiovisual (AV) entertainment content, such as films and television series. The EC investigated the impact of the transaction in the national and EEA-wide markets for: the production of films for release in cinemas, the distribution of films for release in cinemas, the production and licensing of AV content, the wholesale supply of television channels, and the retail supply of AV services.

At the film production level, enough film studios remain as competitors in the EEA, the EC found. However, at the film distribution level, the transaction would result in high concentration and increased transparency in the EEA countries where Paramount has a structural partnership with Universal, due to the addition of Warner's film portfolio. The partnership focuses on the distribution of Paramount's and Universal's films to cinema operators through their joint venture, UIP. The transaction would have meant Warner's films were also distributed via UIP and, without the commitments, it would have led to worse rental and distribution terms for cinema operators, ultimately disadvantaging consumers.

As regards the AV value chain, enough alternative competitors remain to exert sufficient competitive pressure on the merged entity in the EEA. The EC noted that, regarding pay TV channels for children, streaming platforms offering children's content will continue to act as a competitive constraint on the merged entity's TV channels.

The offered commitments. The EC's competition concerns at film distribution level are fully addressed by the following remedies offered by Paramount:

• Termination of Paramount's stake in UIP in the EEA within 13 months from the closing of the transaction;

• For a period of ten years, Paramount will not, directly or indirectly:

• enter into any agreement or understanding with Universal to jointly co-distribute films in the EEA;

• shift the distribution of Warner's films from Warner's existing distributor to the theatrical distributor used by Paramount, where that distributor also distributes Universal's or Disney's films in all UIP countries in the EEA (that is Bulgaria, Croatia, Czechia, Cyprus, Denmark, Estonia, Finland, Greece, Hungary, Iceland, Latvia, Lithuania, Norway, Poland, Portugal, Romania, Slovakia, Slovenia and Sweden); and

• in the UIP countries in the EEA where Paramount and Universal do not share the same distributor, shift the distribution of Paramount's films from Paramount's existing distributor to the theatrical distributor used by Warner, where that distributor also distributes Universal's or Disney's films.

These remedies will ensure that the films of the merged entity will not be distributed jointly with those of Universal or Disney. As modified, the merger will no longer raise competition concerns. The EC approval is conditional upon full compliance with the commitments. Under the supervision of the EC, an independent trustee will monitor their implementation.

Recent activity in the U.S. On June 12, 2026, the DOJ Antitrust Division announced its approval of the $110 billion deal. However, a consumer lawsuit challenging the merger had already been filed, and even more were to follow.

In May 2026, five consumers of video, news, and film media filed a private antitrust action challenging the merger under Section 7 of the Clayton Act. On July 14, two sister labor unions, the Writers Guild of America, West, Inc. and Writers Guild of America, East, Inc., filed a similar antitrust lawsuit. Finally, on July 13, 2026, California Attorney General Rob Bonta, leading a coalition of 11 other state attorneys, announced another legal action.

On July 20, 2026, the federal district court in San Jose awarded the coalition of states a TRO preventing the consummation of the merger. The court found that the Plaintiff States presented compelling evidence that the combined firm would possess substantial market share in the wide-release theatrical distribution market. In fact, under the Herfindahl-Hirschman Index (HHI) the merger would “result in significant market concentration based on market HHI along with a significant change in HHI.” Along with that showing of serious questions going to the merits, the other requirements of preliminary injunctive relief were also satisfied, the court found (State of California v. Paramount Skydance Corp., No. 4:26-cv-07116-AMO (N.D. Cal. Jul. 20, 2026)).

Companies: Paramount Skydance Corp.; Warner Bros. Discovery

News: Antitrust AcquisitionsMergers CaliforniaNews GCNNews