Business, Entertainment

Does the MPAA violate Anti-Trust Laws – Is MPAA a Cartel?

Do the MPAA and RIAA violate the antitrust law? That is a question I am sure that many would like to know. On the surface, it would seem that since there are multiple studios they would not be a monopoly but Anti-Trust also covers oligopolies and cartels. It is the second of these that the MPAA would seem to fall squarely into.

Let take a look at some basic facts, the MPAA [Motion Picture Association of America][ is made up of multiple studios that have banded together for, so they claim, mutual protection against the rising threat of piracy and IP [Intellectual Property] protection. Currently, members of MPAA are as follows:

  • Walt Disney Motion Pictures
  • Columbia Pictures
  • Paramount Pictures
  • 20th Century Fox
  • Universal Studios
  • Warner Bros

MGM was a member until Sony attempted to buy them in 2005, Sony still maintains an interest through Columbia though and also purchased Lions Gate in the aftermath of the failed MGM buy.

Viacom is represented by Paramount and is another very vocal company in the “war” on piracy and has been accused of being a monopoly themselves. In fact they have had several antitrust complaints files on them including one by EchoStar in 2004. In fact – if you check the history of the MPAA they have been accused time and again of violating the same laws the so zealously pursue against private citizens. But then again there really is not much that is not dirty with this group.

These studios represent more than 70% [at best calculation] of the movies released in the US and are banded together to form a cartel. This behavior is prohibited by the Sherman Anti-Trust laws. In fact – the Sherman Antitrust law of 1890 was enacted specifically because of this type of behavior. In the 1800s Oil, Railroad and other large corporations banned together for mutual profit by keeping the prices fixed at a high rate.  It hurt the consumer and stifled the competition.

The same thing is being repeated today with the MPAA and RIAA. They are working on concert to keep prices fixed, maintain an unacceptable control on the market and the media, and hurt the consumer by deploying cartel-like pricing schemes.

We have seen the governments go after Microsoft and Intel for violating these laws but where are the complaints and investigations into the acts of the Cartel formed by the MPAA and RIAA? To answer that question you need look no farther than our elected officials. In the US they have long been lenient on the media for many reasons. The first is no candidate of elected official wants to anger them. The media outlets can make life horrible for those they do not like, just ask Sarah Palin. The second is that the US media corporations [through individual contributions] donate millions of dollars to the campaigns of the people they want in office. As with any “loan” they will come and ask for a favor in return.

Currently the Obama administration has appointed a large number of people friendly to the MPAA and RIAA into the Department of Justice. This is the very entity that is supposed to go after companies that are in violation of the antitrust laws in the US. Yet lately they seem strangely blind to the activities of these two very powerful cartels. To add insult to injury the President of the United States actually went to a foreign country [at the request of the MPAA and RIAA] to demand they toughen their anti-piracy laws.

Yet today we hear that one group is fighting back, and is filing an antitrust complaint that might actually lead to many more. RealNetworks has filed a complaint alleging that the MPAA and DCCA [DVD Copy Control Association] have a horizontal conspiracy in place to prevent the distribution of electronic copies of DVDs even legal ones.  During testimony by the MPAA in the suit against RealNetworks over RealDVD the MPAA admitted that the [Content Scrambling System] License Agreement was jointly agreed upon by the members of the MPAA and is in clear violation of the Sherman Antitrust Act.

If this complaint is successful it will set a major precedent and could open the gates for others to follow as well as begin the process of breaking up these monster corporations. Perhaps we will see a time when the studios are not controlling the content but providing it like they should be.