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DOJ Warns the Academy That Rule Changes Targeting Netflix Could Violate Antitrust Laws

The Justice Department warned that new rules excluding "online streaming services from eligibility for the Oscars," would "raise antitrust concerns."

Oscar Statuettes89th Annual Academy Awards, Backstage, Los Angeles, USA - 26 Feb 2017

Oscar Statuettes

H. Walker/REX/Shutterstock

The Justice Department sent a warning letter to The Academy of Motion Picture Arts and Sciences voicing concern that new Oscars eligibility rules targeting Netflix and other streaming services could violate antitrust laws, Variety is reporting. The letter was sent by the chief of Dept. of Justice’s Antitrust Division, Makan Delrahim, to AMPAS CEO Dawn Hudson on March 21, and cited The Sherman Antitrust Act of 1890, which regulates competition among enterprises.

“In the event that 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,” wrote Delrahim in the letter.

The letter comes a little over a month after director Steven Spielberg and other industry leaders indicated the Academy was considering updating eligibility requirements to exclude streaming platforms from Oscars eligibility. Netflix had its biggest Oscar season yet this year, when “Roma” took home three statues from its 10 nominations.

“Once you commit to a television format, you’re a TV movie,” Spielberg told ITV News in March. “You certainly, if it’s a good show, deserve an Emmy. But not an Oscar.”

An Academy spokesperson told Variety it had “received a letter from the Dept. of Justice and…responded accordingly. The Academy’s Board of Governors will meet on April 23 for its annual awards rules meeting, where all branches submit possible updates for consideration.”

“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. “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 [of the Sherman Act].”

IndieWire has reached out to Netflix for comment.

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