Blog Post

OFT Clears Lovefilm’s Amazon DVD Acquisition

The Office of Fair Trading (OFT) has cleared Lovefilm‘s acquisition of Amazon’s DVD rental business despite significant earlier competition concerns. The deal, under which Amazon (NSDQ: AMZN) is handing over its UK and German DVD mail order business after taking a majority stake in LoveFilm, would give the pair over 90 percent of the UK market, leading the OFT to fear “the firm could worsen its retail offer”. In the end, LoveFilm’s documents convinced it otherwise because “it faces from an array of other providers of video content”. OFT cited stores like Blockbuster (NYSE: BBI), DVD ownership, PPV, cable/satellite film channels, VOD and online as significant enough competitors. In order words, LoveFilm – which also operates the white-label DVD rental services for the likes of Tesco – may have a lock on that market, but DVDs are not the be-all-and-end-all. Release and full determination.