ICLE Amicus Brief Argues District Court Misapplied Antitrust Law in Fubo v Disney Case
PORTLAND, Ore. (Sept. 30, 2024) – A recent U.S. District Court ruling that blocked Disney, Fox, and Warner Brothers Discover from bringing their planned sports-centered streaming service to market amounted to protecting competitors like the plaintiff FuboTV at the expense of consumers, according to an amicus brief filed with the 2nd U.S. Circuit Court of Appeals by the International Center for Law & Economics (ICLE) and a dozen distinguished scholars of law and economics.
In their brief, the ICLE scholars argue that Fubo would not suffer an antitrust injury from the planned Venu Sports joint venture, which would combine the three studios’ live pay-TV channels that offer sports programming into a single streaming service. While that programming is also carried by Fubo, Venu will offer a smaller bundle of channels at what is expected to be a more affordable price for subscribers. In addition, the scholars argue that Fubo cannot establish the necessary prerequisites to liability to support its claim that the company has been subjected to a “price squeeze.”
“By enjoining the JV’s entry into the market, the district court protected Fubo from having to compete with this new and attractive offering and therefore inverted the fundamental antitrust principle articulated time and again by the Supreme Court: It allowed Fubo to use antitrust law to protect itself—a competitor—from competition,” the ICLE scholars wrote.
The scholars also note that, in applying the U.S. Supreme Court’s 1980 decision in United States v. Columbia Pictures, the District Court relied on an inapposite precedent decided long before the court’s Trinko decision recognized significant limits to an antitrust duty to deal. Moreover, they argue the court condemned a standard ancillary and necessary joint-venture restraint, and presumed economically irrational behavior would fill the competitive gap absent Venu.
“The district court’s enjoining of Venu sacrifices a competitive ‘bird in the hand’—a comprehensive, low-priced live sports-streaming service whose entry would enhance competition in the live pay TV market and benefit consumers—for a highly speculative ‘bird in the bush’ of economically implausible future sports-streaming offerings,” the ICLE scholars wrote.
To schedule an interview with ICLE President Geoffrey Manne, Senior Scholar Daniel Gilman, or Academic Affiliate Thomas Lambert about the case, contact ICLE Media and Communications Manager Elizabeth Lincicome at 919-744-8087 or [email protected].