The U.S. Department of Justice on Friday closed the Antitrust Division’s investigation into FOX Corporation’s proposed acquisition of Roku Inc., according to a department statement.
FOX announced on June 15 that it intended to buy Roku for approximately $22 billion, the department said. FOX’s portfolio includes FOX News Media, FOX Entertainment, FOX Television Stations, and Tubi, which is a free service supported by ads. Roku sells connected TV devices, televisions, streaming players, and smart home devices and operates a connected TV platform with hundreds of streaming applications. Roku also owns and operates The Roku Channel, a free, ad-supported streaming service.
The Antitrust Division said it issued second requests to FOX and Roku and reviewed whether the deal could harm competition among free, ad-supported streaming providers. The division also examined whether FOX could use control of the Roku platform to disadvantage rival content providers after the merger.
The division concluded that new entry by free, ad-supported streaming providers would be “timely, likely, and sufficient,” making a substantial risk of harm to competition unlikely. It also found that Roku depends on carrying a wide range of content to attract consumers and that the merged company would face monetary and reputational harm if it tried to use the platform to hurt FOX’s content rivals. The department said consumers could switch to other connected TV platforms if the Roku platform were degraded. Given the facts, the division said the transaction is not likely to result in harm to competition.
Consistent with those findings, the department said FOX committed to keep Roku open and neutral after the merger. According to the statement, FOX will continue carrying non-FOX content on Roku for at least three years, in line with historical Roku practice. It also pledged not to discriminate against non-FOX content in search, and for application placement to keep letting users reconfigure apps on the Roku home screen. FOX will keep offering data products to third parties on commercially reasonable terms, consistent with Roku’s standard distribution agreement. FOX will also maintain existing contractual firewall commitments that protect competitively sensitive data about non-FOX content partners, covering aggregated and non-aggregated information inferred from or collected through activity on Roku products, including click, search, view and voice data, for at least three years.
Following this review, the department said it has closed its investigation. The division said it will continue to evaluate competition in the industry and may take appropriate action in light of changing facts or circumstances.