Disney pays $50M to settle claims it inflated streaming costs

Disney pays $50M to settle claims it inflated streaming costs

The Walt Disney Company has agreed to a $50 million settlement with subscribers of YouTube TV and DirecTV's live TV streaming services.

The move comes after a lawsuit accused Disney of forcing these services to raise their prices.

The class action complaint was filed in November 2022 by four YouTube TV subscribers in the US District Court for the Northern District of California.

The lawsuit accused Disney of entering 'anticompetitive agreements'

The lawsuit accused Disney of entering "anticompetitive agreements with YouTube TV" and other companies providing broadcast channels over the internet.

It claimed that Disney forced OTT live TV services to increase their prices by mandating distributors to include ESPN, a channel owned by Disney, in their base packages.

The complaint also alleged that by raising prices for ESPN and Hulu + Live TV (Disney's own OTT service), Disney inflated costs across the industry.

The complaint argued that Disney had 'pricing power'

The complaint argued that Disney had "pricing power over the entire" streaming live pay TV (SLPTV) market.

This was due to carriage agreement mandates covering all of Disney's major competitors in the SLPTV market.

The complaint contended these agreements allowed Disney to use ESPN and Hulu as a price floor in the SLPTV market, thereby inflating prices across the board by increasing its own product prices.