Disney agrees to $50M class action settlement over streaming TV price claims

Disney class action lawsuit overview:

• Who: The Walt Disney Co. agreed to a proposed $50 million class action settlement with YouTube TV and DirecTV Stream subscribers.
• Why: Plaintiffs allege Disney drove up streaming television prices by forcing platforms to carry its ESPN networks through anticompetitive carriage agreements.
• Where: The proposed settlement was filed in California federal court.

The Walt Disney Co. agreed to a proposed $50 million settlement to resolve a class action lawsuit alleging the company inflated the cost of streaming services for television subscriptions by requiring platforms to carry its ESPN sports channels.

According to the motion seeking preliminary approval of the deal, YouTube TV and DirecTV Stream subscribers claim Disney used anticompetitive carriage agreements that forced streaming service providers to include expensive ESPN channels in their packages, driving up subscription prices for consumers.

The proposed settlement would establish a $50 million nonreversionary fund to compensate class members who allegedly paid higher subscription prices as a result of Disney’s conduct. 

The settlement classes include individuals who purchased a YouTube TV or DirecTV streaming live pay television subscription from April 1, 2019, through the date of preliminary approval.

Plaintiffs allege Disney required streaming live pay TV providers to carry a bundle of Disney networks, including ESPN channels, as a condition of offering Disney programming. The Disney antitrust lawsuit claims these agreements prevented streaming services from offering lower-cost packages that excluded ESPN channels.

Subscribers argued that Disney’s conduct restricted competition in the streaming live pay television market and caused consumers to pay inflated prices for their subscriptions.

Settlement would require Disney to consider alternative channel packages

In addition to monetary relief, the proposed settlement includes injunctive provisions intended to address the alleged anticompetitive practices.

Under the agreement, Disney would be required to consider proposals from streaming live pay TV providers that allow them to offer subscription packages with fewer Disney networks. These packages could potentially exclude ESPN channels, giving streaming services greater flexibility when negotiating carriage agreements.

The injunctive relief would remain in effect for three years following final court approval of the settlement.

The Disney class action lawsuit previously included claims from a proposed class of FuboTV subscribers, but those claims were separated after a court determined there was a conflict involving the attorneys representing different subscriber groups.

What do you think of this Disney class action settlement? Let us know in the comments.

The YouTube and DirecTV stream classes are represented by Yavar Bathaee, Andrew C. Wolinsky, Priscilla Ghita, Allison J. Watson, Brian J. Dunne, Edward M. Grauman, Kaki J. Johnson and Bryce W. Talbot of Bathaee Dunne LLP.

The Disney streaming antitrust class action lawsuit is Biddle, et al. v. The Walt Disney Co., Case No. 5:22-cv-07317, in the U.S. District Court for the Northern District of California.

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