Disney fails to dismiss antitrust lawsuit over ESPN and Hulu ownership

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Disney’s efforts to dismiss an antitrust class action lawsuit brought by streaming subscribers have been rejected again, but the company will now avoid paying any money.

“The Court again finds plaintiffs’ allegations sufficient to establish Disney’s market power in a clearly defined SLPTV market in the United States,” U.S. District Judge Edward J. Davila wrote today in a complex and mixed ruling for the Mouse House (read the order here).

Back in November 2022, YouTube subscribers in four states filed a class action lawsuit claiming Disney’s control of ESPN and Hulu allowed the Bob Iger-led media giant to “raise prices at market rates by raising the prices of its own products” and also “set a minimum price.” The bold lawsuit said Disney pays more than necessary for its subscriptions because streamers like YouTube TV and Sling TV are required to include ESPN in their base packages.

The 82-page lawsuit also alleged antitrust violations because Disney’s control over content and distribution, including operational control of Hulu and its Hulu + Live TV, created a barrier to entry.

In a tone and wording very similar to his ruling from October of last year, the order granting in part and denying in part Disney’s recent motion to dismiss the lawsuit filed in November 2022 will allow the case to proceed in a further reduced form. However, California-based Judge Davila also excluded any attempts by the plaintiffs to seek damages from the case. With no cash on the table, the only option left is injunctions that would prevent Disney from committing such antitrust violations in the future.

“Because plaintiffs have expressly alleged that the terms of the MFN clause allow Disney to set a minimum price and raise its competitors’ ESPN prices (which are reflected in the prices of the subscription packages) each time it raises Hulu’s prices, the Court finds plaintiffs’ allegations sufficient to assert Disney’s market power in a clearly defined SLPTV market in the United States,” Judge Davila wrote Tuesday.

The Walt Disney Company did not respond to a request for comment on today’s order. If and when they provide a comment, this post will be updated.

Of course, Disney is no stranger to recent antitrust allegations. Along with Warner Bros Discovery and Fox, Disney is also facing an antitrust lawsuit filed in February by Fubo over the trio’s planned sports streaming service, Venu. Venu is set to launch in the fall, just in time for the start of the NFL season – a league that seems to have very little to stream.