Netflix Co-CEO Ted Sarandos appeared before a U.S. Senate hearing on Tuesday to face questioning regarding the company's proposed $82.7 billion acquisition of Warner Bros. Discovery, with the hearing's core focus being the deal's potential impact on the competitive landscape of the streaming entertainment industry.

Senator Mike Lee will chair the hearing, with Sarandos and Warner Bros. Discovery's Chief Strategy Officer, Bruce Campbell, expected to testify. Although the Senate itself lacks the authority to block the deal, the hearing provides lawmakers an opportunity to demand that Netflix detail how the transaction would affect consumers, industry workers, and competitors.

The U.S. Department of Justice is currently conducting a review of the proposed acquisition. Concurrently, Paramount Global-Skydance Media has presented a competing hostile takeover bid for Warner Bros. Discovery.

Both Netflix and Paramount-Skydance are vying for Warner Bros. Discovery, primarily because it possesses top-tier film and television production studios, an extensive content library, and a portfolio of heavyweight classic IP, including "Game of Thrones," "Harry Potter," and DC Comics superheroes like Batman and Superman.

Paramount has asserted that its acquisition proposal would face smoother regulatory approval. However, Warner Bros. Discovery has repeatedly rejected Paramount's offers, and Paramount would need to take on substantial debt to finance the transaction.

Paramount's CEO is David Ellison, whose father is Oracle co-founder and billionaire Larry Ellison. Larry Ellison is known to have a close relationship with former U.S. President Donald Trump.

Republican Senator Mike Lee from Utah, who chairs the Senate Judiciary Subcommittee on Antitrust, has been a critic of the acquisition since it was announced last December. Lawmakers from both major U.S. political parties have expressed concerns that the deal could stifle competition in the streaming market.

Netflix cited data from media analytics firm Nielsen, stating that Google's YouTube far exceeds other streaming platforms in viewing time on U.S. television screens. However, experts suggest the Department of Justice might analyze the competitive impact within a more narrowly defined market, such as the sector of streaming platforms that charge users a monthly fee.

Senator Lee also raised questions about whether Netflix genuinely intends to acquire Warner Bros. Discovery or is instead attempting to use the DOJ's antitrust review—which could take over a year—to hamper Warner Bros. Discovery's competitive momentum.

The Republican senator demanded that Netflix disclose whether its employees have already been granted access to Warner Bros. Discovery's sensitive information. He argued that such access could provide Netflix with a competitive advantage even before the deal is finalized.

In a letter to Netflix in January, Senator Lee stated, "Access to such sensitive information could foster anti-competitive behavior, including replicating projects under development by Warner Bros. Discovery, appropriating its strategic plans, or emulating its algorithmic targeting strategies."