We weren’t kidding when we said this really isn’t Oscar’s best friend race anymore. In what can only be described as an eyebrow-raising development, the United States Department of Justice has formally warned the Academy of Motion Picture Arts and Sciences that potentially changing the rules to limit Netflix or other streaming services’ Academy Awards eligibility could spark antitrust concerns and break competition law.
In a letter obtained by Variety, the chief of the DOJ’s Antitrust Division, Makan Delrahim noted, “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.”
The correspondence was sent to AMPAS CEO Dawn Hudson on March 21.
According to the trade, Delrahim referred to Section 1 of the Sherman Act that “prohibits anticompetitive agreements among competitors.” He added, “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.” As well as, “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.”
In a statement, AMPAS responded, “We’ve received a letter from the Dept. of Justice and have 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.”
It appears that the DOJ’s letter was in response to media reports that Steven Spielberg wanted to voice his concerns over Netflix movies qualifying for the Oscars. There has been a lot of back and forth about whether Spielberg will actually speak or if someone else will take up his cause. Spielberg, along with a number of other prominent members, reportedly want to lengthen the current qualifying theatrical run beyond one week and potentially add prerequisites such as a release of box office figures. Many believe this unnecessary and the current qualifying set up will remain the status quo, but somehow it was brought to the DOJ’s attention.
Overall, the fact the DOJ would even feel it was necessary to notify the Academy is a concern to the entire industry. Outside of regulatory concerns over corporate mergers (ATT/Time Warner, Disney/20th Century Fox), the DOJ’s antitrust division has been almost “hand’s off” Hollywood with some degree. Throw in the ongoing dispute between the WGA and the Association of Talent Agents (which comes to a head at midnight on Saturday), agencies such as Endeavor reportedly planning public offerings and controversies over agencies creating their own content with their clients (in theory, the California Labor Code forbids this) perhaps its not that surprising regulatory agencies are keeping a closer eye on Hollywood than one might have expected.