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Movielink Cleared in DOJ Investigation

4 Jun, 2004 By: Holly J. Wagner

The U.S. Department of Justice's antitrust division has closed its investigation into Movielink, the Internet Protocol (IP) video-on-demand (VOD) joint venture the five major movie studios formed.

The studios — Sony (Columbia TriStar Pictures), Warner Bros., MGM, Paramount and Universal — launched the service in late 2002. By then, the DOJ began investigating whether or not the service — purely theoretical when it was announced and the investigation began — was in danger of curtailing competition in the video industry.

“The division's substantial investigation of Movielink does not indicate that the formation of this joint venture by five of the major movie studios harmed competition or consumers of movies,” according to a DOJ statement. “The investigation focused on whether formation of the joint venture facilitated collusion among the studios or decreased their incentives to license movie content to competing (VOD) providers. The division considered several theories of competitive harm, but ultimately determined that the evidence does not support a conclusion that the structure of the joint venture increased prices or otherwise reduced competition in the retail markets in which Movielink competes. The division will continue to monitor activity in these emerging markets as part of its ongoing enforcement of the antitrust laws.”

In fact, IP VOD service CinemaNow.com had movies from 20th Century Fox before Movielink.

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