The Justice Department is stepping up its investigation into whether the three largest theater chains — Regal, AMC Entertainment, and Cinemark — use their market muscle to prevent independent rivals from securing potential blockbuster releases. AMC says in an SEC filing this morning that it received a Civil Investigative Demand on Thursday from the Justice Department’s Antitrust Division, and another on Friday from the Ohio Attorney General.
Each requests “the production of documents and answers to interrogatories concerning potentially anticompetitive conduct, including film clearances and participation in certain joint ventures.”
AMC says that it doesn’t believe that it has violated antitrust laws and is “cooperating with the relevant governmental authorities.” It adds, though, that “we cannot predict the ultimate scope, duration or outcome of these investigations.”
Clearance agreements have become increasingly frustrating for smaller theater chains. They say the practice violates antitrust law, limits consumer choice and is used to muscle competitors out of business, the Wall Street Journal noted in a report in April on the federal interest in the matter — which had not yet become a formal investigation.
Studios frequently resist limiting the number of theaters playing their movies because they prefer to maximize revenue for opening weekends on big movies.