Disney Seeks Dismissal of ESPN Antitrust Lawsuit
Lawyers for the Walt Disney Company asked a U.S. judge to dismiss a pair of antitrust cases against the company on Tuesday.
The lawsuits stem from the costs of rival streaming services YouTube TV and DirectTV Stream, which plaintiffs argue are artificially driven up by agreements with Disney and ESPN.
The Background
In order to understand the lawsuit, we have to talk about how YouTube TV and DirectTV Stream work. Both services feature a base package that includes ESPN, as part of a larger agreement with Disney.
In 2021, YouTube TV and Disney publicly clashed, when YouTube said it would provide a subscription plan without ESPN. That plan would have cost $15 less than their current base plan.
The companies subsequently seem to have come to an agreement, as this new package was never offered.
The Plaintiffs’ Argument
Plaintiffs in the case argue that they are forced to pay more money for the minimum subscriptions on both YouTube TV and Direct TV Stream, specifically because ESPN “must” be included.
Lawyers argue that this has allowed Disney to essentially “set a price floor” for the TV streaming market.
“Many consumers would prefer a base package that does not include ESPN and costs meaningfully less” the plaintiffs’ lawyers said.
Disney’s Defense
Disney, on the other hand, argues that the nine plaintiffs in these cases “misconstrue basic antitrust and economic concepts”.
The company’s attorneys at Farella Braun + Martel and Cravath, Swaine & Moore argue that the plaintiffs have failed to show “a relevant antitrust market in which competition was harmed” and that “antitrust laws exist to protect competition not individuals”.
Disney attorney’s have also pointed to a 2012 ruling form the 9th U.S. Circuit Court of Appeals that stated the purchase of unwanted products “is not itself an injury to competition”. The ruling goes on to say this is true even if it means “reducing customer’s choices or increasing prices to consumers”.
While Disney feels that it has a strong case for dismissal, the company will have to wait until July, when U.S. District Judge Edward Davilia will consider their bid to end the lawsuits.
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