If you’re looking for where the most crucial governmental backlash to a merger deal involving Warner Bros. Discovery, you might want to turn your attention east — to Europe, where regulators are girding to take an early look at any such deal.

Both of the leading bidders — Netflix, which has the blessing of the WBD board, and Paramount, which launched a hostile takeover bid — could face obstacles from the European Union. EU officials have spoken only vaguely about their role in judging whatever deal emerges, since the outcome of the tussle remains in doubt.

The European Commission “could enter to assess” the outcome in the future, Teresa Ribera, the EU’s top antitrust official, said last week at a conference in Brussels, but she didn’t go beyond that. Pressure is mounting within Europe for close scrutiny of any deal.

As early as May, UNIC, the trade organization of European cinemas, expressed opposition to a Netflix deal. The exhibitors’ concern is Netflix’s disdain for theatrical distribution of its content compared to streaming.

“Netflix has time and again made it clear that it doesn’t believe in cinemas and their business model,” UNIC stated. “Netflix has released only a handful of titles in cinemas, usually to chase awards, and only for a very short period, denying cinema operators a fair window of exclusivity.”

Neither WBD nor Netflix has commented on the prospect of EU oversight of their deal. Paramount, however, has made it a key point in its appeals to the WBD board and shareholders.

In both overtures, Paramount made much of the size and potential anti-competitive nature of Netflix’s acquisition of WBD. In a Dec. 1 letter sent via WBD’s lawyers, Paramount asserted that the Netflix deal “likely will never close due to antitrust and regulatory challenges in the United States and in most jurisdictions abroad. … Regulators around the world will rightfully scrutinize the loss of competition to the dominant Netflix streamer.”

Netflix’s dominance of the streaming market is even greater in Europe than in the U.S., Paramount said, citing a Standard & Poor’s estimate that Netflix holds a 51% share of European streaming revenue. That figure swamps the second-place service, Disney, with only a 10% share. Paramount made essentially the same points in its Dec. 10 letter to WBD shareholders, launching its hostile takeover attempt at Warner.

European business regulators have been rather more determined in scrutinizing big merger deals — and about the behavior of major corporate “platforms” such as Google and X.com — than U.S. agencies, especially under Republican administrations. One reason may be the role of federal judges in overseeing antitrust enforcement by the Federal Trade Commission.

“Despite the European Commission (EC) successfully doling out fines numbering in the billions of euros for giants like Apple and Google for distorting competition, the FTC has struggled significantly in court, losing virtually all its merger challenges in 2023,” a survey from Columbia Law School observed last year.

The survey pointed to differing legal standards motivating antitrust oversight: “American courts have placed undue weight on preventing consumer harm rather than safeguarding competition; by contrast, the EU has remained centered on establishing clear standards for competitive fairness.”

In September, for example, the European Commission fined Google nearly $3.5 billion for favoring its own online advertising display services over competing providers. (Google has said it will appeal.) The action was the fourth multi-billion-dollar fine imposed on Google by the EC since 2017; Google won one appeal and lost another; an appeal of the third is pending.

As an ostensibly independent administrative entity, the EC at least theoretically comes under less political pressure from the 27 individual members of the European Union than the FTC and Department of Justice face from U.S. political leaders.

President Trump has made no secret of his doubts about the Netflix-WBD deal. As I reported last week, Trump has said that Netflix’s deal “could be a problem,” citing the companies’ combined share of the streaming market. Trump said he “would be involved” in his administration’s decision whether to approve any deal.

That feels like a Trumpian thumb on the scale favoring Paramount. The Ellison family is personally and politically aligned with Trump, and among those contributing financing to the bid is the sovereign wealth fund of Saudi Arabia, a country that has recently received lavish praise from Trump. Another backer is Affinity Partners, a private equity fund led by Jared Kushner, Trump’s son-in-law.

The most important question about European oversight of the quest for WBD is what the regulators might do about it. The European Commission tends to be reluctant to block deals outright. The last time the EC blocked a deal was in 2023, when it prohibited a merger between the online travel agencies Booking.com and eTraveli. The EC ruling is under appeal.

At least two proposed mega-mergers were withdrawn in 2024 while they were under the EC’s penetrating “Phase II” scrutiny: the acquisition of robot vacuum cleaner maker iRobot by Amazon, and the merger of two Spanish airlines, IAG and Air Europa.

Typically, the EC addresses potentially anticompetitive mergers by requiring the divestment of overlapping businesses. In the case of Netflix and WBD, the likely divestment target would be HBO Max, which competes directly with Netflix in entertainment streaming. Paramount’s streaming service, Paramount+, also competes with HBO Max but not on the same scale as Netflix.

Antitrust rules aren’t the only possible pitfall for Netflix and Paramount. Others are the EU’s Digital Services Act and Digital Markets Act, which went into effect in 2022. The latter applies mostly to social media platforms—the six companies initially deemed to fall within its jurisdiction were Alphabet (the parent of Google), Amazon, Apple, ByteDance (the parent of TikTok), Meta and Microsoft. Those “gatekeepers” can’t favor their own services over those of competitors and have to open their own ecosystems to competitors for the good of users.

The Digital Services Act imposes rules of transparency and content moderation on large digital services. No platforms owned by Netflix, Paramount or WBD are on the roster of 19 originally named by the EU as falling under the law’s jurisdiction, but its regulations could constrain efforts by a merged company to move into social media.

The EU also has begun to show greater concern about foreign investments in strategic assets. Traditionally, these assets are those connected with national security. But defining them is left up to member countries. As my colleague Meg James reported, the sovereign funds of Saudi Arabia, Abu Dhabi and Qatar have agreed to back the Ellisons’ WBD bid with $24 billion — twice the sum the Ellison family has said it would contribute.

The Gulf states’ role has already raised political issues in the U.S., since the cable news channel CNN would be part of the sale to Paramount (though not to Netflix). Paramount says those investors, along with a firm associated with Kushner, have agreed to “forgo any governance rights — including board representation.”

That pledge aims to keep the deal out of the jurisdiction of the U.S. government’s Committee on Foreign Investment in the United States, or CFIUS, which must clear foreign investments in U.S. companies. But whether it would satisfy any European countries that choose to see Warner Bros. Discovery as a strategically important entity is unknown.

Then there’s Trump’s apparent favoring of the Paramount bid. Trump is majestically unpopular among European political leaders, who resent his pro-Russian bias in efforts to end Russia’s invasion of Ukraine. Trump has castigated European leaders as “weak” stewards of their “decaying” countries.

The administration’s recently published National Security Strategy white paper advocated “cultivating resistance to Europe’s current trajectory” and extolled “the growing influence of patriotic European parties,” which many European leaders interpreted as support for antidemocratic movements.

The document “effectively declares war on European politics, Europe’s political leaders, and the European Union,” in the judgment of the bipartisan Center for Strategic and International Studies.

How all these forces will play out as the bidding war for WBD moves toward its conclusion is imponderable just now. What’s likely is that the rumbling won’t stop at the U.S. border.

Roomba maker IRobot filed for bankruptcy and will go private after being acquired by its Chinese supplier Picea Robotics.

Founded 35 years ago, the Massachusetts company pioneered the development of home vacuum robots and grew to become one of the most recognizable American consumer brands.

Over the years, it lost ground to Chinese competitors with less-expensive products. This year, the company was clobbered by President Trump’s tariffs. At its peak during the pandemic, IRobot was valued at $3 billion.

The bankruptcy filing, which happened on Sunday, has raised fear among Roomba users who are worried about “bricking,” which is when a device stops working or is rendered useless due to a lack of software updates.

The company has tried assuaging the fears, saying that it will continue operations with no anticipated disruption to its app functionality, customer programs or product support.

The majority of IRobot products sold in the U.S. are manufactured in Vietnam, which was hit with a 46% tariff, eroding profits and competitiveness of the company. The tariffs increased IRobot’s costs by $23 million in 2025, according to its court filings.

In 2024, IRobot’s revenue stood at $681 million, about 24% lower than the previous year. The company owed hundreds of millions in debt and long-term loans. Once the court-supervised transaction is complete, IRobot will become a private company owned by contract manufacturer Picea Robotics.

Today, nearly 70% of the global smart vacuum robot market is dominated by Chinese brands, according to IDC, with Roborock and Ecovacs leading the charge.

The sale of a famous household brand to a Chinese competitor has prompted complaints from Silicon Valley entrepreneurs and politicians, citing the case as a failure of antitrust policy.

Amazon originally planned to acquire IRobot for $1.4 billion, but in early 2024, it terminated the merger after scrutiny from European regulators, supported by then-Federal Trade Commission Chair Lina Khan. IRobot never recovered from that.

The central concern for the merger was that Amazon could unduly favor IRobot products in its marketplace, according to Joseph Coniglio, director of antitrust and innovation at the think tank Information Technology and Innovation Foundation.

Buying IRobot could have expanded Amazon’s portfolio of home devices, including Ring and Alexa, he said, bolstering American competition in the robot vacuum market.

“Blocking this deal was a strategic error,” said Dirk Auer, director of competition policy at the International Center for Law & Economics. “The consequence is that we have handed an easy win to Chinese rivals. IRobot was the only significant Western player left in this space. By denying them the resources needed to compete, regulators have left American consumers with fewer alternatives to Chinese dominance.”

“While IRobot has become a peripheral player recently, Amazon had the specific capacity to reverse those fortunes — specifically by integrating IRobot into its successful ecosystem of home devices,” Auer said. “The best way to handle global competition is to ensure U.S. firms are free to merge, scale and innovate, rather than trying to thwart Chinese firms via regulation. We should be enabling our companies to compete, not restricting their ability to find a path forward.”

California lost jobs for the fourth consecutive month in September — and it’s expected to add only 62,000 new jobs next year as high taxes drag on business formation, according to a report released Thursday.

The annual Chapman University economic forecast released Thursday found that the state’s job growth totaled just 2% from the second quarter of 2022 to the second quarter of this year, ranking it 48th among all states.

That matches California’s low ranking on the Tax Foundation’s 2024 State Business Tax Climate Index, which measures the rate of taxes and how they are assessed, according to the Gary Anderson Center for Economic Research report by the Orange, Calif., school.

The state also experienced a net population outflow of more than 1 million residents from 2021 to 2023, with the top five destinations being states with zero or very low state income taxes: Texas, Arizona, Nevada, Idaho and Florida, the report noted.

What’s more, the average adjusted gross income for those leaving California was $134,000 in 2022, while for those entering it was $113,000, according to the most recent IRS data on net income flows cited by the report.

“High relative state taxes not only drive out jobs, but they also drive out people,” said the report, which expects just a 0.3% increase in California jobs next year leading to the 62,000 net gain.

More unsettling, the report said, was a “sharp decline” in the number of companies and other advanced industry concerns established in California relative to other states, in such sectors as technology, software, aerospace and medical products.

California accounted for 17.5% of all such establishments in the fourth quarter of 2018, but that dropped to 14.9% in the first quarter of this year. Much of the competition came from low-tax states, the report said.

California saw the number of advanced industry establishments grow from 89,300 to 108,600 from 2018 through this year, but low-tax states saw a 52.2% growth rate from 164,000 to 249,600 establishments, it said.

Also on Thursday, the U.S. Bureau of Labor Statistics released its monthly states jobs report, which had been delayed by the government shutdown. It, too, showed California had a weak labor market with the state losing 4,500 jobs for the month, edging up its unemployment rate from 5.5% to 5.6%, the highest in the nation aside from Washington, D.C.

The state has lost jobs since June as tech companies in the Bay Area and elsewhere shed employees and spend billions of dollars on developing artificial intelligence capabilities.

There have also been high-profile layoffs in Hollywood amid a drop-off in filming, runaway production to other states and countries, and industry consolidation, such as the bidding war being conducted over Warner Bros. Discovery. The latter is expected to bring even deeper cuts in Southern California’s cornerstone film and TV industry.

Michael Bernick, a former director of California’s Employment Development Department, said such industry trends are only partially to blame for the state’s poor job performance.

“The greater part of the explanation lies in the costs and liabilities of hiring in California — costs and especially liabilities that are higher than other states,” he said in an emailed statement.

Nationally, the Chapman report cited the Trump administration’s tariffs as a drag on the economy, noting they are greater than the Smoot-Hawley Tariff Act of 1930 thought to have exacerbated the Great Depression.

That act only increased tariffs on average by 13.5% to 20% and mainly on agricultural and manufactured products, while the Trump tariffs “cover most goods and affect all of our trading partners.”

As a consequence, the report projects that annual job growth next year will reach only 0.2%, which will curb GDP growth.

The report predicts the national economy will grow by 2% next year, slightly higher than this year’s 1.8% expected rate. Among the positive factors influencing the economy are AI investment and interest rates, while slowing growth — aside from tariffs and the jobs picture — is low demand for new housing.

The report cites lower rates of family formation, lower immigration rates and a declining birth rate contributing to the lower housing demand.