The DOJ Antitrust Division Just Warned the Academy About Blocking Netflix From the Oscars

Assistant Attorney General for Antitrust Makan Delrahim outside federal court in DC, June 2018.
Photo: Jose Luis Magana (AP)

The Department of Justice has warned the CEO of the Academy of Motion Picture Arts and Sciences, Dawn Hudson, that any attempts to prevent Netflix and other streaming video companies from receiving eligibility to be considered for an Academy Award may earn it antitrust attention, Variety reported on Tuesday.

Variety obtained a letter dated March 21, 2019, from DOJ Antitrust Division chief Makan Delrahim to Hudson stating the possibility that any such rule could “suppress competition.” He added that if the “Academy—an association that includes multiple competitors in its membership—establishes certain eligibility requirements for the Oscars that eliminate competition without procompetitive justification, such conduct may raise antitrust concerns.”

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Variety wrote that Delrahim added the DOJ’s head may turn in the Academy’s direction if it believes any such rule is intended to protect the market share and profits of “incumbent firms”:

“Accordingly, agreements among competitors to exclude new competitors can violate the antitrust laws when their purpose or effect is to impede competition by goods or services that consumers purchase and enjoy but which threaten the profits of incumbent firms,” Delrahim wrote.

He added, “if the Academy adopts a new rule to exclude certain types of films, such as films distributed via online streaming services, from eligibility for the Oscars, and that exclusion tends to diminish the excluded films’ sales, that rule could therefore violate Section 1.”

The most vocal voice to exclude Netflix and other streaming services, of course, has been director Steven Spielberg—who last year began ramping up his exhortations that because Netflix is a TV format, all of its film productions are technically TV movies and should be submitted for the Emmy Awards instead. The Oscar eligibility guidelines also state that any film put up for consideration must have first gone through a qualifying theatrical release before it is distributed via another channel.

As Indiewire noted, the movie industry may have gripes about Netflix’s business tactics, including its refusal to abide by industry standard, 90 day theatrical release windows and heavy Oscars lobbying, but Netflix does match the same qualifying theatrical release targets as many smaller and indie releases. Netflix productions have also already won multiple Academy Awards, thus making Spielberg seem more than a little late to the party. (There’s also the fact that Spielberg has made some notorious stinkers in the past, undermining his seeming stance that the loutish Netflix could potentially stink up the Academy’s highfalutin soirée.)

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However, Variety reported in early March 2019 that Spielberg was planning on pressing the issue further with Academy members, and Netflix has fired back—that’s not even considering that the numerous other streaming services already in operation or being planned for launch in the near future are going to feel just as strongly about plans to exclude them.

“Steven feels strongly about the difference between the streaming and theatrical situation,” an Amblin Entertainment spokesperson told IndieWire. “He’ll be happy if the others will join [his campaign] when that comes up [at the Academy Board of Governors meeting]. He will see what happens.” (According to IndieWire, the Academy said that meeting will likely be this month.)

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Delrahim’s decision to put his thumb on the scale adds yet another odd dimension to what’s going on. Maybe he’s a streamer. In any case, Delrahim has a full plate with other big priorities on it right now, such as the potentially terrible for consumers Sprint/T-Mobile merger, which his office hasn’t issued a decision on yet.

[Variety]

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Tom McKay

"... An upperclassman who had been researching terrorist groups online." - Washington Post