YouTube TV users sue Disney over streaming TV market prices

The logo of the Walt Disney Company is displayed above the floor of the New York Stock Exchange shortly after the closing bell as the market takes a significant dip in New York, U.S., February 25, 2020. REUTERS/Lucas Jackson
  • Antitrust lawsuit accused Disney of imposing "upward price pressure" in market
  • YouTube TV and Disney feuded last year over content agreement

(Reuters) - YouTube TV subscribers in California, Arizona and elsewhere have sued The Walt Disney Co in California federal court, alleging the media company's business agreements with competitors have artificially pushed up how much consumers pay across the market for live television streamed over the internet.

The proposed class action filed on Friday in San Francisco federal court said Disney's control of both Hulu, the country's second-largest live streaming pay television provider, and the sports network ESPN has allowed the company "to set a price floor" for the market and to "inflate prices marketwise by raising the prices of its own products."

Disney requires streaming providers such as YouTube TV to include ESPN as part of a base package, and the plaintiffs claimed they "paid prices for their YouTube TV subscriptions that were higher than they would have been absent Disney's anticompetitive conduct."

A Disney spokesperson on Monday did not immediately reply to a message seeking comment about the lawsuit.

The plaintiffs' lawyers at Bathe Dunne declined to comment.

The named plaintiffs also include YouTube TV subscribers in Indiana and Kentucky. The complaint said there are about 5 million YouTube TV subscribers paying "anticompetitive inflated" subscription fees.

The complaint did not specify a damages amount.

Last year, Disney and YouTube TV, owned by Alphabet Inc's Google, feuded over a content agreement, the lawsuit said. At the time, YouTube indicated that it would provide a plan without ESPN and other Disney-owned channels for $15 less than what it was charging.

YouTube TV restored access to ESPN and other Disney networks after the two sides reached a deal.

The complaint said "many consumers would prefer a base package that does not include ESPN and costs meaningfully less."

A Google spokesperson did not immediately respond to a message seeking comment.

The plaintiffs lawyers have asked the California court to issue an injunction allowing them to decline "base bundles with ESPN and related Disney-controlled channels."

The lawsuit asserted that the price of base bundles from YouTube TV, Hulu + Live TV and other providers now are "nearly at parity with basic cable packages from traditional satellite and cable TV providers."

The case is Biddle v. The Walt Disney Co, U.S. District Court for the Northern District of California, No. 22-cv-07317.

For plaintiffs: Yavar Bathe and Brian Dunne of Bathe Dunne

For defendant: No appearance yet

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