According to Deadline, a federal judge in California ruled that a class action antitrust lawsuit against Disney can move forward.
What’s Happening:
- A federal judge in California has ruled that a class action antitrust lawsuit against Disney can move forward, although he struck down a large part of the case, which was filed last fall.
- The group of YouTube TV subscribers have claimed that the company's business deals with competitors have boosted the amount customers pay for the service.
- They state that because Disney requires streamers, including YouTube TV and Sling TV, to include ESPN in base packages, customers are paying more than they should have to for the service.
- Judge Edward Davila of the U.S. District Court in San Jose granted part of the suit but denied the pricing claims and related damages.
- He stated that plaintiffs did not present "cognizable injury" to competition and said they have until October 16 to refile.
- "The Court agrees with Disney that, to the extent Plaintiffs rely on allegations of reduced consumer choice and increased subscription prices, these allegations are insufficient to allege an injury to competition," he said. But, "Plaintiffs also allege that, in addition to increased prices, the infrastructure and agreements have produced barriers to entry. Detailed allegations of barriers to entry are sufficient to allege anticompetitive harm."
- Plaintiffs said that Disney’s anticompetitive conduct has prevented "entry by potential rival because a new entrant would need to contract with Disney in order to obtain "several notable channels," such as ESPN…Disney thus maintains a cost input into each market participant’s product, and can prevent or retard entry."
- "For the foregoing reasons, Defendant’s motion to dismiss for failure to state a claim is GRANTED IN PART and DENIED IN PART with leave to amend," the court said.