GoKawiilThe Walt Disney Company has agreed to pay $50 million to subscribers of YouTube TV and DirecTV’s live TV streaming services to settle a lawsuit that claimed that Disney forced these services to raise their prices.
In November 2022, four YouTube TV subscribers filed a class action complaint (PDF) against Disney in the US District Court for the Northern District of California. They accused Disney of entering “anticompetitive agreements with YouTube TV” and other companies that provide access to broadcast channels via the Internet.
The complaint argued that Disney forced over-the-top (OTT) live TV services to cost more by requiring distributors to include ESPN, which Disney owns, with their base packages.
Additionally, by raising prices for ESPN and for Hulu + Live TV, (Disney’s own OTT live TV service that includes ESPN), Disney drove up prices across the industry, the complaint argued.
The filing claimed that Disney had “pricing power over the entire” streaming live pay TV (SLPTV) market for two main reasons:
… these carriage agreement mandates—which now cover all of Disney’s leading competitors in the SLPTV Market—allow Disney to use ESPN and Hulu to set a price floor in the SLPTV Market and to inflate prices marketwide by raising the prices of its own products. And this is exactly what Disney has done in the past three years, since it took operational control of Hulu.
The complaint pointed out that YouTube TV’s base package increased from $35 to $65 after adding Disney-owned channels. It also noted that during YouTube TV and Disney’s 2021 carrier dispute, YouTube TV said that its base plan would be $15 cheaper without Disney-owned channels.