Justice Department Threatens Academy On Behalf Of Netflix (AWARDS)

DOJ Oscar

The Swamp is coming for the Oscars.

In a shocking — and completely outrageous — shot across the bow from none other than the United States Federal Government, the Department Of Justice served a letter to the Academy of Motion Pictures of Arts & Sciences warning them to tread lightly when it comes to rule changes that might affect Netflix’s Oscar eligibility.

According to an exclusive report by Variety, “the chief of the DOJ’s Antitrust Division, Makan Delrahim, wrote to AMPAS CEO Dawn Hudson on March 21 to express concerns that new rules would be written “in a way that tends to suppress competition,” further adding:

  • “In the event that the Academy — an association that includes multiple competitors in its membership — establishes certain eligibility requirements for the Oscars that eliminate competition without procompetitive justification, such conduct may raise antitrust concerns.”

To make this threat “legal,” Delrahim cited Section 1 of the Sherman Act which “prohibits anticompetitive agreements among competitors.” Then, throwing down a gauntlet, Delrahim stated plainly:

  • “If the Academy adopts a new rule to exclude certain types of films, such as films distributed via online streaming services, from eligibility for the Oscars, and that exclusion tends to diminish the excluded films’ sales, that rule could therefore violate Section 1.”

Forgive my crude French, but I call bullshit.

I’m not a legal expert but this makes no sense (nor does it to The Hollywood Reporter). The Academy is a private organization that hands out annual awards, ones that are merit-based and not financial. They have every right to set whatever standards of eligibility they want to for their private awards. If they didn’t, then no organization of any kind could bestow honors according to a set criteria.

Yes, Oscar nominations can tangentially affect a movie’s bottom line, but there is not a literal exchange of cash or profits involved, thus making the DOJ’s citation of antitrust laws — which deal with the public marketplace where customer and vendor dollars are exchanged — completely and utterly absurd, and arguably unconstitutional.

It’s so absurd, in fact, that one wonders who at Netflix is friends with Delrahim or others inside the DOJ. Granted, Delrahim cited “online streaming services” and not Netflix specifically, but this hardly seems like a warning made on principle.

The DOJ letter is not some random fluke. It comes right before the Academy’s next Board of Governors meeting where, reportedly, Steven Spielberg wants to address the eligibility rules for films and distributors (Netflix, streaming, or otherwise) that don’t commit to theatrical-exclusive release windows.

What makes the DOJ letter particularly strange is that it’s pre-emptive.

Setting aside the seemingly weak legal argument, isn’t DOJ action (or any government action) inherently supposed to be reactive? Since when does the government go around ad hoc warning businesses and industries (or anyone) to not commit crimes, and that they’re “watching you”? Orwellian much?

Even something like the legality of the recent Disney-Fox merger (for which there were actual arguable grounds of antitrust infringement) was taken into consideration by the goverment after the merger was proposed.

There’s something fishy here. Somebody from Netflix is trying to muscle the Academy with the power of the Federal Government. I hope the industry trade papers and reporters do some serious investigative work and get to the bottom of this.

Regardless of what potential scandal may be uncovered, if I were the Academy I’d be motivated now more than ever to change the rules if only to challenge this gross, abusive overreach. Call Delrahim’s bluff. Let the Justice Department sue, then embarrass them in court.

But I doubt it’d even come to that. With no actual grounds to fight on, I’d wager that the DOJ would stand down from their completely meritless provocation. And if they didn’t, I’d expect a judge to simply throw out the case on its face. It’s that stupid.

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