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Sports streaming platform fubo tv is suing disney, Fox and Warner Bros. Discovery about their recently announced joint venture, citing what the company calls “extreme suppression of competition in the U.S. sports-focused streaming market,” according to a copy of the lawsuit obtained by CNBC.
The joint venture, announced earlier this month, aims to offer viewers a new way to access live sports highlights. It is scheduled to launch this fall, but several questions remain about its price and structure.
“These horizontal competitors are colluding to create a joint venture that will cause substantial harm to competition and consumers,” the complaint reads.
The lawsuit also names Disney-owned ESPN and Hulu as defendants.
“Each of these companies has consistently engaged in anti-competitive practices that aim to monopolize the market, stifle any form of competition, create higher prices for subscribers and deceive consumers from having a deserved choice,” said the director. FuboTV executive David Gandler said in a statement. “By joining together to exclusively reserve the distribution rights for a specialized live sports package, we believe these corporations are erecting insurmountable barriers that will effectively block any new competitors from entering the market.”
A spokesman for the joint venture declined to comment.
Fubo argues that Disney, Fox and Warner Bros., which control a significant portion of live sports content in the U.S., imposed bundling requirements and “significantly above-market licensing fees” on Fubo, inflating prices for the consumers.
Now, their new joint venture allows media companies to undercut those prices and avoid the same restrictions on which channels they have to broadcast, giving them a competitive advantage, the lawsuit alleges.
As recently as last week, the joint venture was raising eyebrows in the traditional pay-TV market, with leaders of major distributors privately expressing concern that the new slim package would increase cable TV cancellations, Alex reported CNBC's Sherman.
Craig Moffett, an analyst at MoffettNathanson, said at the time that antitrust challenges were likely.
