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Fox Says Redbox Lawsuit Is Flawed

1 Oct, 2009 By: Erik Gruenwedel

Declaring the claims “flawed” and legally unviable, lawyers for 20th Century Fox Home Entertainment Oct. 1 filed a brief with the court seeking to dismiss rental kiosk operator Redbox’s Aug. 11 antitrust lawsuit against the studio.

The brief, filed in U.S. District Court in Delaware, said the dispute between 20th Century Fox Home Entertainment and Redbox revolves around pricing and terms and not the studio’s refusal to distribute Fox new-release DVDs via kiosks.

Redbox, which is owned by Coinstar Inc., filed separate litigation against Fox, Warner Home Video and Universal Studios Home Entertainment after the studios separately mandated shipment delays from 28 to 45 days after street date for new releases.

The filing said that despite Redbox’s refusal to accept Fox’s pricing and related terms, the studio said it would sell new-release DVDs to the kiosk operator — 30 days after retail.

Specifically, Fox insists that “antitrust law does not require a seller to provide its product through the distribution channel that the buyer demands, on the date that the buyer demands, or at the price that the buyer demands.

The studio says it has considerable freedom under the law to sell (or not sell) to whomever it wants, how it wants, and when it wants. Fox said the restrictions imposed upon Redbox do not violate antitrust laws unless the kiosk operator can prove the restrictions violate a contract and competition in a plausible antitrust market. 

“Redbox cannot meet any of these elements, let alone all of them, as it must to state a viable antitrust claim,” said the filing.

In a statement, Fox said Redbox’s legal claims are “fatally flawed."

“Fox’s filing today makes clear that, in the end, the case is all about Redbox’s refusal to make a business deal on general terms similar to those paid by others in this industry. Instead, Redbox has insisted that Fox sell DVDs to them through distributors, on the date they demand, at the price they want to pay. Unable to get the terms it wanted at the bargaining table, Redbox instead decided to file this merit-less lawsuit,” said the studio.

In response, Redbox president Mitch Lowe said the kiosk operator remained confident in its legal position and the merits of its case. 

He said studios such as Paramount Home Entertainment, Lionsgate and Sony Pictures Home Entertainment have worked with Redbox to “protect” access to new release DVDs, which he said was a “win-win-win for consumers, studios, and Redbox.”

“Twentieth Century Fox continues its pursuit to prohibit consumer access to new release DVDs at affordable prices,” Lowe said, in a statement. “Redbox remains steadfast in our commitment to protecting consumers’ rights and to providing our customers the DVDs they want, where they want and at the low price they want.”


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