Academy warned by Justice Department over possible Oscar rule changes to limit Netflix

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The Justice Division has warned the Academy of Movement Image Arts and Sciences that its potential rule adjustments limiting the eligibility of Netflix and different streaming companies for the Oscars may elevate antitrust considerations and violate competitors legislation.

In accordance with a letter obtained by Selection, the chief of the DOJ’s Antitrust Division, Makan Delrahim, wrote to AMPAS CEO Daybreak Hudson on March 21 to precise considerations that new guidelines can be written “in a means that tends to suppress competitors.”

“Within the occasion that the Academy — an affiliation that features a number of rivals in its membership — establishes sure eligibility necessities for the Oscars that eradicate competitors with out procompetitive justification, such conduct might elevate antitrust considerations,” Delrahim wrote.

The letter got here in response to stories that Steven Spielberg, an Academy board member, was planning to push for guidelines adjustments to Oscars eligibility, limiting motion pictures that debut on Netflix and different streaming companies across the identical time that they present in theaters. Netflix made a giant splash on the Oscars this 12 months, because the film “Roma” gained finest director, finest overseas language movie and finest cinematography.

An Academy spokesperson stated, “We’ve obtained 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 guidelines assembly, the place all branches submit doable updates for consideration.”

Delrahim cited Part 1 of the Sherman Act that “prohibits anticompetitive agreements amongst rivals.”

“Accordingly, agreements amongst rivals to exclude new rivals can violate the antitrust legal guidelines when their goal or impact is to impede competitors by items or companies that customers buy and luxuriate in however which threaten the earnings of incumbent companies,” Delrahim wrote.

He added, “if the Academy adopts a brand new rule to exclude sure varieties of movies, resembling movies distributed by way of on-line streaming companies, from eligibility for the Oscars, and that exclusion tends to decrease the excluded movies’ gross sales, that rule may subsequently violate Part 1.”

Spielberg’s considerations over the eligibility of flicks on streaming platforms have triggered intense debate within the business. Netflix responded on Twitter early final month with the assertion, “We love cinema. Listed below are some issues we additionally love. Entry for individuals who can’t all the time afford, or stay in cities with out, theaters. Letting everybody, in all places get pleasure from releases on the identical time. Giving filmmakers extra methods to share artwork. These items are usually not mutually unique.”

Spielberg advised ITV Information final 12 months that Netflix and different streaming platforms have boosted the standard of tv, however “when you decide to a tv format, you’re a TV film. … If it’s present—deserve an Emmy, however not an Oscar.”

The letter displays considerations that the Justice Division has been involved concerning the skill of conventional media retailers to restrict competitors from new streaming video entrants, even people who have grown considerably lately like Netflix and Amazon Prime. These considerations have been touched upon within the AT&T-Time Warner transaction and later trial, and likewise have been a part of a consent decree reached to clear the Comcast-NBC Common transaction in 2011. The latter included provisions that ruled how the corporate handled on-line video distributors, however these circumstances expired final 12 months.

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