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Redbox: Suit vs. Warner Same as Universal and Should Continue



By : Chris Tribbey | Posted: 03 Feb 2010


DVD kiosk operator Redbox in a Jan. 29 court filing argues that its case against Warner should go forward since a judge has already allowed Redbox to argue antitrust violations against Universal, and because the cases are so similar.

Redbox says those studios, as well as Fox, broke the law when they told wholesalers VPD and Ingram to stop selling to Redbox unless the kiosk operator agreed to keep new-release titles unavailable for at 28 to 45 days.

In August, Judge Robert Kugler allowed Redbox’s allegations of antitrust violations against Universal to go forward, writing that “The court is convinced that plaintiff sufficiently pleaded that Universal has induced or otherwise convinced others to boycott Redbox in distribution of Universal DVDs, producing anti-competitive effects.”

Warner and Fox sought to dismiss Redbox’s lawsuit against them in late December, arguing that Redbox was taking them to court in order to gain the upper hand in business negotiations. Warner said it was “exercising its unilateral right to release its product at different times in ‘windows.’”

But Redbox says in its Jan. 29 filing that its case, at least against Warner, should move forward, since the arguments are the same as those in the Universal case.

“This court held that it was ‘convinced’ that Redbox had pled a valid claim under Section 1 of the Sherman Act, including its claim that Universal had induced or convinced others to boycott Redbox and that Universal’s actions had produced anticompetitive effects,” the Redbox filing argues. “Like the Universal complaint, Redbox has here stated facts reflecting a concerted effort, orchestrated this time by Warner, also a distributor of DVDs, to artificially restrict supply and increase prices for the rental of new-release DVDs through facially anticompetitive behavior.”

Redbox also says its claims of tortious interference with prospective business opportunity and unfair competition against Warner should move forward as well.

“[These] are claims not raised in the Universal action,” Redbox argues. “These claims have not previously been considered by the court. Redbox will show that Warner’s interference with Redbox’s relationship with retailers constitutes tortious interference with prospective business opportunity and unfair competition. Warner’s motion to dismiss these claims should be denied.”

Redbox has accused Warner and Fox of telling Wal-Mart, Target and Best Buy to limit the sale of new-release DVDs to Redbox representatives.


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