Disney again fails to dismiss class action lawsuit alleging antitrust violations
The complaint was filed by several streaming subscribers alleging that the purchase of Hulu and ESPN allowed the entertainment giant to inflate prices in the market.
Logos of The Walt Disney Company, ESPN and Hulu next to a TV remote control.
Disney failed again in its attempt to dismiss a class action lawsuit filed by several streaming subscribers for violating antitrust rules.
Filed two years ago, the complaint alleged that the entertainment giant's purchase of Hulu and ESPN undermined the supply and demand made by other streaming services as it allowed Walt Disney Corporation to "inflate prices in the market" as well as "set a price floor."
The lawsuit will go forward but, unlike the previous times, Disney will not have to pay compensation if it is guilty. So said U.S. District Judge Edward J. Davila on Tuesday in a ruling obtained by Deadline:
"The Court once again finds Plaintiffs’ allegations sufficient to plead Disney’s market power in a well-defined SLPTV market in the United States."
It all started in November 2022 when YouTube subscribers in several states sued Disney claiming that the purchase of sports channel ESPN as well as youth channel Hulu allowed the Bob Iger-led giant to inflate prices in the market by raising prices for its own products.
The plaintiffs explained that Disney forced streaming services such as YouTube TV and Sling TV to increase the price of their basic packages if they included the ESPN subscription.
Along with this, the plaintiffs alleged that antitrust laws were violated as Disney's acquisition of Hulu and Hulu + Live TV allowed the giant to control content and distribution, thus constituting a major impediment to other providers entering the market.
Both charges will go forward albeit more slowly than expected. What they will not be able to seek, in any case, is compensation.
"Because Plaintiffs have specifically alleged that the terms of the MFN provision permit Disney to set a price floor and raise its competitors’ ESPN prices (which translate to the subscription package prices) whenever it raises Hulu’s prices, the Court finds Plaintiffs’ allegations sufficient to plead Disney’s market power in a well-defined SLPTV market in the United States," Judge Davila wrote Tuesday in the ruling forwarded to The Hollywood Reporter.
Meanwhile, the entertainment giant continues to pursue mergers and create joint packages with other major cable TV channels and streaming services, which could spell further legal trouble for the company down the road.
The Walt Disney Company has yet to comment on the ruling. However, it is expected that it will again attempt to dismiss the lawsuit as it did in October 2022.
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