Disney pays $50M to settle claims it inflated streaming costs
What's the story
The Walt Disney Company has agreed to a $50 million settlement with subscribers of YouTube TV and DirecTV's live TV streaming services. The move comes after a lawsuit accused Disney of forcing these services to raise their prices. The class action complaint was filed in November 2022 by four YouTube TV subscribers in the US District Court for the Northern District of California.
Accusations
The lawsuit accused Disney of entering 'anticompetitive agreements'
The lawsuit accused Disney of entering "anticompetitive agreements with YouTube TV" and other companies providing broadcast channels over the internet. It claimed that Disney forced OTT live TV services to increase their prices by mandating distributors to include ESPN, a channel owned by Disney, in their base packages. The complaint also alleged that by raising prices for ESPN and Hulu + Live TV (Disney's own OTT service), Disney inflated costs across the industry.
Market influence
The complaint argued that Disney had 'pricing power'
The complaint argued that Disney had "pricing power over the entire" streaming live pay TV (SLPTV) market. This was due to carriage agreement mandates covering all of Disney's major competitors in the SLPTV market. The complaint contended these agreements allowed Disney to use ESPN and Hulu as a price floor in the SLPTV market, thereby inflating prices across the board by increasing its own product prices.
Price increase
YouTube TV's base package increased from $35 to $65
The complaint highlighted that YouTube TV's base package increased from $35 to $65 after adding Disney-owned channels. It also noted that during a carrier dispute between YouTube TV and Disney in 2021, the former claimed its base plan would be $15 cheaper without Disney-owned channels. The complaint sought class action certification and a jury trial but was settled out of court in March 2026.
Settlement details
Settlement agreement details
Under the settlement agreement, Disney has agreed to pay a sum of $50 million. Customers who are eligible for a share of the settlement are those who subscribed to YouTube TV, DirecTV Stream, DirecTV Now, and/or AT&T TV Now between April 1, 2019 and March 31, 2026. "While Disney has not admitted any wrongdoing in the case, it has agreed to 'consider' giving distributors an option to offer subscribers fewer Disney-owned channels for three years following approval of the settlement.