Disney hit with antitrust lawsuit by Fubo subscribers
After Disney dropped its sports-focused streaming service Venu, the entertainment giant was accused of violating antitrust laws over its dual role as a content provider and distributor in business transactions.
One Fubo subscriber claimed in a class action lawsuit filed Tuesday in New York federal court that Disney's ownership of ESPN “enables it to access the live streaming pay TV market and extract monopoly rents by forcing the service to carry non-ESPN content.” Sports channels must be included as part of the cheapest packages for consumers.
“These anticompetitive tactics limit competition among Disney's Hulu competitors in the SLPTV market and force independent streaming services like Fubo to charge customers higher prices than they would in the free market,” the complaint states.
On Friday, Disney, Warner Bros. Discovery Channel and Fox said Venu would not move forward. Previously, Disney announced plans to merge its Hulu + Live TV service with rival Fubo, which would become the second-largest streaming MVPD after YouTube TV.
But by then, the legitimacy of Disney's bundling demands had been eroded. In its order temporarily blocking Venu, the court said the bundling has been “uniformly and systematically imposed on every distributor in the live pay TV industry except the joint venture, thereby preventing any other distributor from offering sports-focused multi-channels” Streaming services”.
Fubo's case revolves around the argument that Disney, Fox and Warner have used their control of must-have sports to force rivals to operate dozens of expensive and unpopular channels as a “take-or-behave” deal to license key sports channels or give up” condition. These anti-competitive bundling requirements are said to result in increased costs for consumers as they are forced to pay for content they do not watch.
Tuesday's lawsuit builds on Fubo's arguments. The complaint alleges that Disney imposed anti-competitive terms on competitors, forcing them to include ESPN as part of the cheapest bundles it offered and creating so-called most-favored-nation clauses that ensured that the ESPN affiliate fees negotiated with any particular competitor represented industry-wide prices. lower limit.
“Disney’s anticompetitive conduct includes leveraging its dominant share of commercially critical sports content broadcast licenses to force Fubo to license and broadcast unwanted, expensive non-sports content,” the complaint states. “This prevents Fubo from delivering what its customers want. ’s sports-focused channel pack.”
The lawsuit alleges violations of federal and state antitrust laws. It seeks treble damages, a return of profits and a court order declaring the most-favored-nation clause and bundling agreement to violate anti-rust laws.
Disney did not immediately respond to a request for comment.
Last year, a federal judge raised key antitrust claims from YouTube TV subscribers who filed the same lawsuit against Disney. U.S. District Judge Edward Davila declined to dismiss the lawsuit, arguing that the company could use its ownership of Hulu to raise prices for live TV broadcast over the Internet across the market.
The lawsuit, like the Fubo subscriber lawsuit, centers on Disney's control of a popular channel on ESPN and SLPTV on Hulu, and whether the entertainment giant negotiated anti-competitive transmission deals for ESPN that raised the stakes Subscription prices across the market.