Disney’s attempt to dismiss an antitrust class action brought by streaming subscribers has been denied again. However, the court has ruled that the company will not be liable for any monetary compensation.
U.S. District Judge Edward Davila ruled that the company may have exploited its acquisition of Hulu to inflate the prices of internet-streamed live TV across the market on Tuesday, rejecting Disney’s attempts to dismiss an antitrust lawsuit. The court further found that Disney might have enforced anti-competitive terms on competitors such as Dish’s Sling TV and AT&T’s DirecTV by mandating the inclusion of ESPN in their lowest-cost bundles. Additionally, the court concluded Disney’s use of most favored nation clauses potentially set an industry-wide price floor for ESPN affiliate fees.
In November 2022, subscribers of YouTube TV filed a lawsuit against Disney, accusing the company of inflating prices for live TV streamed over the internet. The lawsuit centers on Disney’s control of the popular SLPTV service Hulu and the ESPN channel, alleging that Disney negotiated anticompetitive carriage agreements for ESPN, resulting in higher subscription prices across the market.
Furthermore, the complaint alleges violations of the Sherman Act for unreasonable restraints of trade, along with various state competition and consumer protection laws and represents around five million YouTube TV subscribers.
Notably, U.S. District Judge Edward Davila, in a ruling similar to what he decided in October last year, has partially granted and partially denied Disney’s latest attempt to dismiss the antitrust lawsuit filed in November 2022. Additionally, Judge Davila has removed the plaintiffs’ claims for damages from the proceedings, and the case will proceed in a more limited form. This leaves the possibility of injunctions aimed at preventing Disney from committing similar antitrust violations in the future.
Judge Davila wrote, “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.”