Fox filed documents today in the ongoing litigation between Redbox and various Hollywood studios. These papers are the studio’s opening brief in support of its motion to dismiss RedBox’s claim, and outline for the first time to the court Fox’s position on the Redbox dispute:
— Fox has not refused to provide DVDs to Redbox. Redbox’s own complaint reveals that Fox tried to negotiate a contract to provide DVDs directly to Redbox. But after months of negotiations, the parties could not agree on price and other terms, even though Fox had offered Redbox terms similar to those accepted by other customers.
— After Redbox refused to accept those terms, Fox had the right to stop selling DVDs to Redbox altogether. It did not. Instead, Fox informed its distributors that they could continue selling Fox DVDs to Redbox 30 days after Fox initially released the DVD, but not before.
— The court papers make clear that Redbox has no viable legal case. 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. To the contrary, sellers have considerable freedom under the law to sell (or not sell) to whomever they want, how they want, and when they want. To this end, a seller’s restriction on its distributor does not violate antitrust laws unless the plaintiff proves (i) an agreement; that (ii) injures competition; (iii) 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.
— The Motion to Transfer contains factual details on the negotiations which further illustrate Fox’s willingness to provide DVDs to Redbox.
Below is a statement from Fox:
Los Angeles, October 1, 2009 –“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 meritless lawsuit.”
And then Redbox president Mitch Lowe responded with this statement:
We are confident in our legal position and the merits of our case as underscored by a recent decision in Delaware Federal Court.
20th Century Fox continues its pursuit to prohibit consumer access to new release DVDs at affordable prices. 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.
Studios, including Paramount, Lionsgate and Sony Pictures Home Entertainment (SPHE), have worked with redbox to protect consumers’ access to new release DVDs. These types of agreements are win-win-win for consumers, studios, and redbox.
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