A federal antitrust lawsuit has been filed against The Walt Disney Company for allegedly using its dual status as both a streamer as well as a content provider to violate antitrust protections to raise internet streaming service prices throughout the country.
The central conflict ties to Disney's ownership of ESPN, which has long had the highest cable TV carriage fees (four times higher than its next competitor), and the fact that carriage fees for ESPN were built into all basic cable packages was one of the reasons why people began to "cut the cord" on cable, as even the most basic cable packages were getting too expensive for some consumers. So people moved to live-streaming services, like YouTube TV, but as it turns out, Disney is now baking similar ESPN fees into live-streaming services, as well.
Recently, YouTube TV and Disney were at an impasse over the licensing agreement for ESPN and other channels, and ultimately the companies came to a deal at the end of last year, and part of the agreement involved YouTube TV agreeing to the same carriage fee setup that Disney has with every other live streamer that carries ESPN, which insists that A. ESPN be included in all basic plans and that B. The price for ESPN's live-streaming carriage fee would be no lower than the lowest streaming service on the market.
The problem there, of course, was that Disney owned a streaming service, and thus when it raised prices of Hulu + Live TV, then every other live-streaming service had to raise its prices, as well. YouTube TV's basic plan has almost doubled in price, from $35 to its current $65. During its back and forth with Disney over licensing fees, YouTube TV claimed that it could charge $15 less for a basic plan that did not include ESPN. Obviously, though, that is no longer possible now that its new agreement agrees to always include ESPN in its most basic plan. Therefore, the lawsuit alleges that Disney using its different companies to raise the price of live-streaming overall is tantamount to price-fixing and violates federal antitrust laws.
The four named plantiffs are Heather Biddle of California, Jeffrey Kaplan of Arizona, Zachary Roberts of Indiana and Joel Wilson of Kentucky.
Source: The Hollywood Reporter