Following Disney’s abandonment of its sports-focused streaming service Venu, the entertainment giant is facing a lawsuit for alleged antitrust violations related to its dual role as a content supplier and distributor in the transaction. There is.
In a proposed class action lawsuit filed in New York federal court on Tuesday, Fubo subscribers are being held accountable for their streaming service, alleging that Disney’s ownership of ESPN could force access to services that distribute content other than ESPN. – Claims that it will be possible to extract exclusive rents in the live pay TV market. Sports channels should be included as part of the cheapest package for consumers.
“These anti-competitive strategies stifle competition in the SLPTV market between rivals and Disney’s Hulu, and force independent streaming services like Fubo to charge customers higher prices than the free market.” says the complaint.
On Friday, Disney, Warner Bros. Discovery and Fox announced that Veenu would not be moving forward. This comes after Disney announced plans to merge its Hulu + Live TV service with competitor Fubo, making it the second-largest streaming MVPD after YouTube TV.
But by that point, the legality of Disney’s bundling requirement had already been compromised. In its order temporarily halting Venu’s release, the court noted that bundling is “uniformly and systematically imposed on each broadcaster in the pay live TV industry, excluding joint ventures, and that other broadcasters are “It prevents us from providing multi-channel streaming services.” ”
Fubo’s lawsuit alleges that Disney, Fox and Warner used their vital sports control to give rival companies dozens of expensive and unpopular channels as a condition of licensing key sports channels. It centered on the argument that The company argues that these anti-competitive bundling requirements lead to increased costs because consumers have to pay for content they don’t watch.
Tuesday’s lawsuit is based on Fubo’s claims. Disney could force rivals to include ESPN as part of the cheapest bundle it offers, or ensure that the ESPN affiliate fees negotiated with certain competitors would serve as an industry-wide price floor. They allege that they are imposing anti-competitive conditions on their competitors by including so-called most-favored-nation clauses that provide guarantees.
“Disney’s anti-competitive conduct includes using its overwhelming share of broadcast licenses for commercially important sports content to force Fubo to license and broadcast unwanted and expensive non-sports content.” “This includes doing so,” the complaint states. “This will prevent Fubo from offering the sports-focused channel packages that our customers want.”
The lawsuit alleges violations of federal and state antitrust laws. The company is seeking treble damages, disgorgement of profits, and a court order declaring the most-favored-nation condition and bundling agreement to be in violation of the Anti-Corrosion Act.
Disney did not respond to requests for comment.
Last year, a federal judge advanced a major antitrust complaint from YouTube TV subscribers who filed a similar lawsuit against Disney. U.S. District Judge Edward Davila declined to dismiss the lawsuit, saying the company could have used its Hulu ownership to drive up prices for live TV streamed over the internet across markets. It was certified as.
Similar to the lawsuit from Fubo subscribers, the crux of this case is Disney’s control of ESPN’s highly coveted channels and Hulu’s SLPTV, and the entertainment giant negotiating an anti-competitive carriage agreement for ESPN. The main focus was on whether the market as a whole had raised subscription prices.
