Dish Network is hitting back at Disney and EPSN in a legal dispute over the launch of Sling TV limited-time passes. Dish claims the media giant is violating antitrust laws and violating the terms of its contract with Dish in an attempt to stifle competition.
Dish filed antitrust and breach of contract counterclaims against Walt Disney Co. and ESPN on Friday, January 2, in the United States District Court for the Southern District of New York.
This was in response to Disney filing a lawsuit against Dish over Sling TV’s Sling Pass, which includes 1-day, 3-day and 1-week plans, for violating the terms of the companies’ carriage agreement. In November, a federal judge ruled in Dish’s favor, denying Disney’s request to block its short-term streaming plans. The judge found that Disney had not demonstrated a likelihood of success on the merits in its breach of contract claims against Dish/Sling, nor had Disney demonstrated a likelihood of irreparable harm.
In its countersuit, Dish said it asserted that it was “not contractually obligated to consult” with Disney or ESPN before launching Sling Pass, which is marketed as a flexible way for consumers to watch live sports without purchasing an extended subscription. Additionally, Dish “admitted that a limited number of SlingPass promotional materials included the phrase ‘no subscription,’ which was inaccurate,” according to the filing.
Dish’s lawsuit alleges that Disney uses its overwhelming market power to “destroy competition” and stifle innovation. Disn’s counterclaim also alleges that Disney “blatantly” violated its contract. The complaint alleges that Disney granted favorable terms to its competitors, but refused to extend the same terms to Dish and Sling, despite a “most-favored-nation” (MFN) clause in its transportation contract that legally requires it to do so.
Asked for comment, a Disney spokesperson said, “Dish’s counterclaim has no merit and is merely a tactic to distract from their own wrongdoing. We look forward to setting our case straight in court.”
Dish’s legal filings allege that Disney violates the Sherman Act by conditioning access to “essential” sports programming, namely the ESPN network, to the purchase of certain low-value channels. Dish said this illegal effort “forces Sling TV to deliver content that customers don’t want, increases costs, and prevents affordable packaging.”
Additionally, Dish argued that Disney’s acquisition of Fubo (which merged with Hulu’s live TV business) and the introduction of the ESPN-Fox One bundle violate antitrust laws by “eliminating competition.” According to a Dish representative, by acquiring Fubo, Disney is “effectively stocking itself with consumer-friendly sports options and blocking alternative skinny bundles.”
In addition, Dish claimed that Disney is trying to corner the “lean sports bundle market” by launching its standalone streaming service ESPN Unlimited, acquiring Fubo and enforcing “restrictive agreements.” Through these actions, Dish’s legal filings say Disney seeks to ensure that it is the sole provider of “flexible” sports packages that artificially inflate consumer prices.
Dish’s counterclaim seeks unspecified monetary damages. The ruling found that Disney and ESPN’s actions violated U.S. antitrust laws. and an injunction forcing Disney to “unwind” its bundled acquisition of Fubo, ESPN, and Fox One.
