Department of Justice Wades into Academy Awards Controversy
On March 21, 2019, the Antitrust Division of the Department of Justice wrote a letter to the CEO of the Academy of Motion Picture Arts and Sciences.[1] The letter claims to be in response to “news reporting” that the Academy was considering amending its rules in a way that would “[limit] eligibility for the Academy Awards.”[2] The reporting that the Department of Justice alludes to stems from statements made by Steven Spielberg and his studio, Amblin, about the emergence of streaming platforms and their presence at the Academy Awards.[3] In a 2018 interview, Spielberg was quoted as saying, “I don’t believe films that are just given token qualifications in a couple of theatres for less than a week should qualify for the Academy Award nomination.”[4] The recent victories by Netflix’s Roma in this past year’s Academy Awards only added to the sense of urgency.[5] At the 2019 Oscars, Roma (and in the Academy’s eyes, Netflix) ended the night with the awards for Cinematography, Achievement in Directing, and Foreign Language Film. Alfonso Cuarón, the writer and director of Roma, previously took home the 2014 Oscars for his film Gravity, in the Directing and Film Editing categories.[6] Hulu and Amazon Studios have also made a foothold in the Academy Awards in recent years. Hulu’s Minding the Gap was able to get a nomination for Best Documentary in 2019, and Amazon’s Manchester by the Sea made history as the first streaming service movie nominated for Best Picture in 2017.[7]
The Department of Justice letter asserted that antitrust “concerns” could be raised by the actions of the Academy if it were to, “[establish] certain eligibility requirements for the Oscars that eliminate competition without procompetitive justification. . .” [8] The letter references §1 of the Sherman Act, which “prohibits anticompetitive agreements among competitors.”[9] It then goes on to draw a line between the adoption of new rules, to the resulting exclusion of films “distributed via online streaming services” from consideration for Academy Awards, to the tendency of those films’ sales decreasing as a result, which would in turn violate §1 of the Sherman Act.[10] The Justice Department has challenged media companies with antitrust actions in the recent past, with its efforts to block the merger between AT&T and Time Warner being the most public.[11] On February 26, the Department lost its second (and for now, final) challenge against the merger, with the D.C. Circuit ruling in favor of the two media giants.[12] The merger drew the attention of then Presidential Candidate Donald Trump, who stated during the 2016 campaign, “As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few.”[13]
It is not clear yet what effect, if any, the Department of Justice’s letter will have on the governing body at the Academy of Motion Picture Arts and Sciences. The annual “rules meeting” is scheduled to take place on April 23, 2019, where “possible updates for consideration” are proposed, one or several of which could implicate the Academy in exactly the type of behavior the Department references in its letter.[14]
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