Disney to Face Serious Antitrust Claims in Court as Subscribers Accuse the Company of Creating a Monopoly

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Credit: Disney/Canva

The Disney Company will be forced to face claims made by consumers who allege the media and entertainment giant engaged in business operations that violate antitrust laws by creating unfair obstacles for its competitors in the marketplace.

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The Walt Disney Company

Credit: The Walt Disney Company

Over the weekend, U.S. District Judge Edward Davila in San Jose, California, said that The Walt Disney Company must face consumers’ claims against the company that accuse Disney of engaging in business practices that hindered competition in the streaming marketplace, ultimately driving up costs for subscribers.

In two separate orders, each one 25 pages in length, Judge Davila said he would permit customers with subscriptions to Google’s YouTube TV service and AT&T’s DirecTV Stream service to sue Disney for what the orders describe as onerous contracts. According to court documents, subscribers allege that those contracts created obstacles for competitors in the streaming marketplace and, therefore, they violated federal antitrust statutes.

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Though he ruled that Disney will have to face the claims made by the plaintiffs in the complaint, U.S. District Judge Davila said that the plaintiffs in the complaint would not be eligible to seek monetary damages, as he ruled that they had failed to establish that any unlawful agreements or contracts were made among television’s streaming competitors. Further, he barred the plaintiffs from claiming damages because they are considered “indirect” purchases–those who are not involved in the contracts and agreements at the center of their complaint.

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Credit: What’s on Disney Plus

Plaintiffs will have until Monday, October 16, 2023, to file any newly amended case, should they choose to do so, per the judge’s orders.

According to court documents, the two prospective class actions in the matter accuse The Walt Disney Company of using “unmitigated power” in an effort to increase the prices its competitors charge for streaming service by requiring them to include the Disney-owned sports network ESPN in its lowest-priced channel bundles.

At this time, the Disney Company has a controlling interest in the Hulu network, which the plaintiffs claim is the United States’ second-largest streaming provider for paid live television. They also claim that Disney’s content agreements and the infrastructure of streaming television ultimately created unfair obstacles for Disney’s competitors.

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Credit: Disney+

In February, after the complaints were originally filed, Disney’s attorneys argued that the plaintiffs “misconstrued basic antitrust and economic concepts” in the complaints.

Attorneys with Farella Braun + Martel and Cravath, Swaine & Moore, who represent The Walt Disney Company’s interests, said that “antitrust laws exist to protect competition, not individuals.”

On Saturday, U.S. District Judge Davila ruled that the plaintiffs’ “detailed allegations of barriers to entry” established enough reason for a lawsuit to proceed in the matter.

According to Reuters, the plaintiffs in the complaint “are seeking an injunction barring alleged anticompetitive practices.”

About Becky Burkett

Becky's from the Lone Star State and has been writing since she was 10 and encountered her first Disney Park when she was 11. It was love at first Main Street Electrical Parade. Joy is blank lined journals, 0.7 mm pens, and all things Walt, Woody and Buzz, PIXAR, Imagineering, Sleeping Beauty (make it blue!), Disney Parks history and EPCOT. At Disney World, you'll find her croonin' with the birdies at the Enchanted Tiki Room or hangin' with Woody and the gang at Toy Story Land. If you can dream, you really can do it!