Opinions expressed by australiabusinessblog.com contributors are their own.
Disney could face an antitrust lawsuit in a case it’s targeted for its dual role as a distributor and content provider.
Disney owns ESPN and Hulu, the second largest American streamer. THR reports that the class action petition alleges that Disney’s way of managing its streaming business amounts to an arrangement that gives the House of Mouse a chance to engage in anti-competitive negotiations with its competition, leading to higher live streaming costs overall.
YouTube TV subscribers filed the lawsuit Friday in U.S. District Court Central District of California. It outlines their claim that Disney’s hold on the market allows it to set a “floor price” that is higher than it would normally be, noting that Disney’s live-streaming pay-TV contracts require competing services to bundle ESPN with low-cost packages, restricting rival companies from compiling their own picks and omitting ESPN if they choose.
Remove Disney’s insistence on ESPN and competing streamers will be able to offer a wider variety of small bundles that combine a limited choice of live TV viewing.
THR details how, even if the lawsuit is new, complaining about Disney’s stranglehold is not:
Cable television providers have long criticized Disney’s affiliate fees to broadcast ESPN and its sister networks as part of a cable package. Such fees are widely believed to have been the main driver of basic cable price increases over the past decade. In 2015, ESPN’s affiliate fee was a whopping four times the fee for broadcasting TNT, which had the second highest fee after ESPN.
The lawsuit was filed on behalf of several million YouTube TV subscribers. Read the full submission on THR.