Justice Department Warns Academy About Changing Oscar Rules To Exclude Streaming (techcrunch.com)

The Justice Department has warned the Academy of Motion Picture Arts and Sciences that its potential rule changes limiting the eligibility of Netflix and other streaming services for the Oscars could raise antitrust concerns and violate competition law. From the report: According to a letter obtained by Variety, the chief of the DOJ's Antitrust Division, Makan Delrahim, wrote to AMPAS CEO Dawn Hudson on March 21 to express concerns that new rules would be written "in a way that tends to suppress competition." "In the event that the Academy -- an association that includes multiple competitors in its membership -- establishes certain eligibility requirements for the Oscars that eliminate competition without procompetitive justification, such conduct may raise antitrust concerns," Delrahim wrote. The letter came in response to reports that Steven Spielberg, an Academy board member, was planning to push for rules changes to Oscars eligibility, restricting movies that debut on Netflix and other streaming services around the same time that they show in theaters. Netflix made a big splash at the Oscars this year, as the movie "Roma" won best director, best foreign language film and best cinematography.

Delrahim cited Section 1 of the Sherman Act that "prohibits anticompetitive agreements among competitors." "Accordingly, agreements among competitors to exclude new competitors can violate the antitrust laws when their purpose or effect is to impede competition by goods or services that consumers purchase and enjoy but which threaten the profits of incumbent firms," Delrahim wrote. He added, "if the Academy adopts a new rule to exclude certain types of films, such as films distributed via online streaming services, from eligibility for the Oscars, and that exclusion tends to diminish the excluded films' sales, that rule could therefore violate Section 1." An Academy spokesperson said, "We've received a letter from the Dept. of Justice and have responded accordingly. The Academy's Board of Governors will meet on April 23 for its annual awards rules meeting, where all branches submit possible updates for consideration."

Comments

How can this be anti-trust?

[SuperKendall]

It seems like award shows should be free to chose whatever they like as criteria to base awards on - just as the public can feel free to ignore award shows that choose to slide into irrelevancy... not justice department needed I should say.

Re:How can this be anti-trust?

[fustakrakich]

Only one question, who has enough money to get the DOJ involved?

Re:How can this be anti-trust?

[Xenx]

The problem comes in that being Oscar nominated or winning an Oscar is marketable, to the actors in the movies and to the studios for new movies with those actors in it. If a director/actor/etc is given a choice, they would likely want the option to be able to earn an Oscar for their work when it's Oscar worthy work. Following that trail, it then becomes harder for Netflix to make quality movies with major names because the actors don't get their rightful acclaim for the work. At that point, the Academy is supporting traditional studios to the exclusion of potential competition.

It's not like what I'm saying is a guaranteed to happen or anything, but the fact that it can happen means it's at least a concern. And since the Academy is run by the studios, they have a vested interest to prevent outsiders from gaining traction. As such, it would potentially fall under the Sherman Act like the summary mentions.

Re:How can this be anti-trust?

[DRJlaw]

It seems like award shows should be free to chose whatever they like as criteria to base awards on - just as the public can feel free to ignore award shows that choose to slide into irrelevancy... not justice department needed I should say.

It can be because the Sherman Antitrust Act says:

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.

This award show is run via written and oral agreements -- i.e., contracts -- amongst members who are competitors and effectively operates as a trade organization. The Sherman Act does not include an "award show" exception, and I see no need for a snap amateur opinion on whether the Justice Department is needed in lieu of a professional opinion by persons qualified to practice antitrust law, i.e., the DOJ antitrust division.

Re:How can this be anti-trust?

[mcl630]

I don't have a paid Netflix subscription, therefore I cannot watch Netflix movies.

You can't watch a film at the theater without buying a ticket either. I'm not sure how that's relevant to the discussion.

Re:History of the Oscars

[Anonymous Coward]

Fake awards, fake law enforcement. DOJ pretends to enforce anti-trust law, hopes you won't notice banks, telecom, health care.

It's not one organization, it's a cartel of establ

[raymorris]

Imagine if Walmart, Target, Albertsons/Tom Thumb/Safeway, and Whole Foods / Amazon got together and came up with ways of making it harder for new companies to compete with them. It's ilegal for the established companies in a market, competitors, to collude to try to keep out new competitors.

The Motion Picture Academy is basically the major Hollywood studios; their decision to exclude Netflix and other new companies is about the major studios trying to disadvantage competition from the newer companies, according to the Justice Department.

ONE studio can do what it wants to try to cause problems for streaming services. It would be ilegal for them to collude in an anti-competitive conspiracy.

Factually, I don't know if the Academy is controlled by the major studios, but that's the law - if in fact the governors of the academy are trying to protect their employers by disadvantaging streaming services.

Re:Still doubtful

[DRJlaw]

I will say from the outside looking in the argument that any of these awards shows are "trade organizations" seems quite weak, and I would love to see how the court case goes here...

Yes, it's quite a weak argument when you publicly categorize yourself as a trade organization for an exemption from taxation by the IRS.