Federal Judge Blocks Trump’s TikTok Ban in the U.S.

With President Trump’s Aug. 6 executive order banning social media video app TikTok in the United States set to go into effect today (Sept. 27), a federal court judge in Washington D.C. has reportedly approved a preliminary injunction blocking the order.

TikTok owner, Chinese-based ByteDance, Sept. 23 filed for an expedited preliminary injunction against Trump’s executive order, calling it politically motivated and lacking in merit. The Trump Administration, which is involved in ongoing trade and ethnic Muslim disputes with China, argued the TikTok app posed a threat to national security. TikTok reportedly has more than 100 million U.S. users on a monthly basis.

U.S. District Court Judge Carl Nichols, who was appointed to the bench by Trump in 2019, reportedly felt TikTok had not been given the proper time to defend itself in court.

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“This was a largely unilateral decision with very little opportunity for plaintiffs to be heard,” said the judge as reported by the Washington Post.

Trump had initially given his public approval (in a North Carolina campaign rally) for a proposed TikTok asset sale to Oracle and Walmart. But when it was revealed that Oracle and Walmart would collectively own just 20% of new entity TikTok Global, with China controlling 80%, Trump changed his mind.

This is the second legal setback for Trump, who saw a second executive order banning China’s WeChat app overruled by a San Francisco federal magistrate, which cited First Amendment issues in ruling against the president.

Texas Senator Calls for DOJ Investigation of Netflix Regarding ‘Cuties’ Movie

Netflix, a longtime target of right-wing boycotts, is now facing new pressure from some lawmakers looking to score political points in an election year.

Sen. Ted Cruz (R-Tex.) on Sept. 11 sent a letter to U.S. Attorney General Bill Barr asking the Department of Justice to investigate Netflix regarding its marketing and distribution of French film Cuties, a fictional story about an 11-year-old girl from Senegal living in Paris who joins a “twerking dance squad,” upsetting her conservative single mom. Cruz wonders whether distribution of the movie violated any federal laws against the alleged production and distribution of child pornography.

Sen. Ted Cruz (R-Tex.)

“I urge the DOJ to investigate … whether Netflix, its executives, or the individuals involved in the production and distribution of the film violated any federal laws,” Cruz wrote.

Specifically, Cruz alleges the film “routinely fetishizes and sexualizes” pre-adolescent girls performing dance sequences in provocative outfits simulating sexual conduct.

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“These scenes in and of themselves are harmful,” Cruz wrote, suggesting the images could encourage pedophiles globally to imitate “this film in abusive ways.”

Sen. Tom Cotton (R-Ark.) joined the dispute, calling on the DOJ to take “swift” action.

“Like any parent, I find ⁦@Netflix⁩ decision to peddle child pornography disgusting,” Cotton tweeted Sept. 12. “And it’s criminal.”

Rep. Tulsi Gabbard (D-HI) is the lone Democrat criticizing the movie’s release, claiming it would “whet the appetite of pedophiles” and help “fuel” child sex trafficking.

“Netflix, you are now complicit,” Gabbard tweeted.

Netflix, which began streaming Cuties on Sept. 9, changed the film’s initial marketing after receiving criticism on social media. The service contends the movie criticizes — not endorses — the sexualization of minor girls in the media.

“Cuties is an award-winning film and a powerful story about the pressure young girls face on social media and from society more generally growing up — and we’d encourage anyone who cares about these important issues to watch the movie,” Netflix said in a media statement.

The Parents Television Council, a non-partisan education organization advocating responsible entertainment, this week said it stands by its earlier criticism that the TV-MA-rated Cuties sexualizes children.

“By removing the offensive poster and replacing it with a more innocuous one, Netflix might actually have made the situation worse by suggesting that Cuties is nothing more than a cute, coming-of-age movie,” Melissa Henson, program director for the Parents Television Council, said in a statement.

AT&T Drops ‘Watch TV’ Sign-Ups

AT&T has begun informing users that it will no longer offer its low-budget AT&T Watch TV service to new and returning subscribers.

“Standalone WatchTV is no longer available for new sign ups or to re-subscribe,” AT&T said in a statement. “Existing WatchTV customers who subscribe to the app or have a qualifying AT&T Unlimited plan can continue to use the service. Customers on a qualifying AT&T Unlimited plan with the WatchTV benefit can create a separate account.”

Launched in 2018 during AT&T’s contentious regulatory battle with the DOJ over its $85 billion acquisition of Time Warner, and targeting the younger high school and college-age demo using mobile devices, AT&T Watch TV is a $15 a month streaming service featuring select channels and no DVR.

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With the rebranding of DirecTV Now to $39.99 AT&T TV in March, the telecom-turned-media-giant is streamlining its streaming portfolio. AT&T TV also includes access to new subscription streaming video service, and company flagship, HBO Max.

Indeed, the telecom continues to struggle pitching standalone online TV (and linear pay-TV) to consumers. AT&T jettisoned 897,000 combined DirecTV and U-verse subs in the first quarter (ended March 31), in addition to 138,000 AT&T TV members. The one million+ sub loss was up 65.1% from the 627,000 subs lost in the previous-year period.

Guilty Pleas for Operators of Biggest Illegal Movie/TV Show Streaming Service in the U.S.

Two computer programmers in Las Vegas have pleaded guilty to multiple criminal copyright and money laundering charges related to operating one of the biggest illegal television show and movie streaming services in the United States.

The shuttered services iStreamItAll and Jetflix combined had more content than Netflix, Amazon Prime Video or Hulu, according to the U.S. Department of Justice, which made the announcement on Dec. 13.

Darryl Julius Polo, a.k.a. djppimp, 36, pleaded guilty in the U.S. District Court for the Eastern District of Virginia to one count of conspiracy to commit criminal copyright infringement, one count of criminal copyright infringement by distributing a copyrighted work being prepared for commercial distribution, one count of copyright infringement by reproduction or distribution, one count of copyright infringement by public performance and one count of money laundering.

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In a separate proceeding today, co-defendant Luis Angel Villarino, 40, pleaded guilty to one count of conspiracy to commit copyright infringement.

Sentencing for both defendants is set for next March.

iStreamItAll (ISIA) permitted users to stream and download copyrighted television programs and movies without the permission of the relevant copyright owners.

Defendant Polo admitted that he reproduced tens of thousands of copyrighted television episodes and movies without authorization, and streamed and distributed the infringing programs to thousands of paid subscribers located throughout the U.S.

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Specifically, Polo admitted ISIA offered more than 118,479 different television episodes and 10,980 individual movies. Polo sent out emails to potential subscribers highlighting ISIA’s huge catalog of works and urging them to cancel those licensed services and subscribe to ISIA instead.

According to the DOJ, Polo obtained infringing television programs and movies from pirate sites around the world — including some of the world’s biggest torrent and Usenet NZB sites specializing in infringing content — using various automated computer scripts that ran 24 hours a day, seven days a week.

Specifically, Polo used sophisticated computer programming to scour global pirate sites for new illegal content; to download, process, and store these works; and then make the shows and movies available on servers in Canada to ISIA subscribers for streaming and downloading.

Polo also admitted to running several other piracy services, including a Usenet NZB indexing site called SmackDownOnYou — earning more than $1 million from his piracy operations.

Other defendants in the case are scheduled to go to trial starting on Feb. 3, 2020.

DOJ Files Motion to End Paramount Consent Decrees

As expected, the Department of Justice formally filed a motion in the District Court for the Southern District of New York to terminate the Paramount Consent Decrees, which for more than 70 years regulated how certain movie studios distribute films to movie theatres.

As part of the DOJ’s review of nearly 1,300 legacy antitrust judgments, the antitrust division Nov. 22 announced that after a thorough review, including a 60-day public comment period, it had determined that the Paramount decrees have served their original remedial purposes and no longer serve to promote or protect competition and innovation.

“The Paramount decrees long ago ended the horizontal conspiracy among movie companies in the 1930s and ‘40s and undid the effects of that conspiracy on the marketplace,” Makan Delrahim, assistant attorney general of the Justice Department’s antitrust division, said in a statement.

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The Justice Department’s motion to end the Paramount decrees would allow a two-year transition period for block-booking and circuit dealing to allow the theatre and motion picture industry to have an orderly transition to the new licensing changes.

The bulk of domestic exhibition business is currently controlled by AMC Theatres, Regal Entertainment and Cinemark Holdings.

In 1938, the federal government filed an antitrust lawsuit against several major motion picture companies alleging that those companies had engaged in an industry-wide conspiracy to control the motion picture distribution and exhibition markets.

After several years of litigation, including a 1948 Supreme Court decision in United States v. Paramount, the government and the defendants entered into a series of consent decrees, collectively called the Paramount decrees.

These decrees required the movie studios to separate their distribution operations from their exhibition businesses. They also banned various motion picture distribution practices, including block booking (bundling multiple films into one theatre license), circuit dealing (entering into one license that covered all theatres in a theatre circuit), resale price maintenance (setting minimum prices on movie tickets), and granting overbroad clearances (exclusive film licenses for specific geographic areas).

The Paramount decrees, like other legacy antitrust judgments, have no sunset provisions or termination dates. They continue to govern how the film industry conducts its business, despite significant changes to the industry, including technological innovations, new movie platforms, new competitors and business models, and shifting consumer demand.

Unlike 70 years ago, the first-run movie palaces of the 1930s and ‘40s that had one screen and showed one movie at a time have been replaced by multiplex theatres that have multiple screens showing movies from many different distributors at the same time. New technology has created many different movie platforms that did not exist when the decrees were entered into, including cable and broadcast television, DVDs, and the Internet through movie streaming and download services.

“The [government] has concluded that these decrees have served their purpose, and their continued existence may actually harm American consumers by standing in the way of innovative business models for the exhibition of America’s great creative films,” Delrahim said.

 

DOJ Looking to End 1940s-Era Theatrical Movie Distribution Rules

The Department of Justice’s antitrust division is considering ending 1940s-era legislation that prohibits studios from owning movie theaters and controlling the exhibitor release slate, among other provisions.

Known as the Paramount decrees, antitrust efforts at the time led to the 1948 U.S. Supreme Court ruling against Paramount Pictures and other major studios that ended studio ownership of theaters and made it illegal for studios to mandate theaters screen all or none of their new releases, a practice known as “block booking.”

“As the movie industry goes through more changes with technological innovation, with new streaming businesses and new business models, it is our hope that the termination of the Paramount decrees clears the way for consumer-friendly innovation,” Makan Delrahim, the DOJ’s antitrust boss, Nov. 18 told the American Bar Association confab in Washington, D.C.

Delrahim led the Justice Department’s unsuccessful appeal of AT&T’s $85 billion acquisition of Time Warner, which led to the creation of WarnerMedia.

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The DOJ, which would have to file a legal court motion to reverse the law, is seeking a two-year sunset period on several elements of the decrees, including block booking and select license agreements, according to The Wall Street Journal, which first reported the government move.

Observers contend the move could expedite consolidation among the three largest theatrical chains: AMC Theatres, Regal Entertainment and Landmark Holdings, while likely putting smaller exhibitors out of business.

The theatrical business remains under siege by over-the-top video and market domination by Disney, which continues to rule the box office through its Marvel Studios, Pixar Animation and Lucasfilm releases.

Trade group the National Association of Theater Operators suggested a reversal of existing theatrical distribution rules would enable major studios to dominate exhibitor release slates.

“If exhibitors were forced to book out the vast majority of their screens on major studio films for most of the year, this would leave little to no room for important films from smaller studios,” NATO said in a statement.

DOJ Drawn Into Comcast, Starz Carriage Dispute

With legacy pay-TV under siege from cord-cutting subscribers and high-profile alternatives such as Netflix, Amazon Prime Video, Hulu and now Apple TV+, the status quo for traditional carriage agreements has gone out the window.

And so it was that Comcast last month quietly announced it would soon end Xfinity subscriber access to Starz, the premium movie and TV service it acquired in 2016 for $4.4 billion.

The news was significant since Comcast represents about a third of Starz’ 24.4 million subscribers. Starz, which operates its own branded $8.99 monthly subscription streaming service, has been a profit vehicle for Santa Monica, Calif.-based Lionsgate.

Comcast reported it will replace Starz on Dec. 10  with Epix, the premium service owned by MGM and formerly Lionsgate, unless a new agreement can be reached. The news has contributed to a 9% drop in Lionsgate’s stock valuation — which is already down nearly 50% in the fiscal year.

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The negotiation impasse has reportedly caught the attention of the Department of Justice, which continues to have Comcast in its crosshairs ever since its acquisition of NBC Universal in 2009. Back then, regulators forced the cable giant to relinquish management input on its stake in Hulu, citing antitrust issues.

Earlier this year Comcast sold its Hulu stake to Disney after acquiring Sky satellite TV operator in the United Kingdom.

Comcast’s NBC Universal unit is readying its own SVOD service, Peacock, early next year.

The situation prompted Senators Dianne Feinstein (D-CA) and Susan Collins (R-ME) to contact Assistant Attorney General Makan Delrahim to investigate the situation. Delrahim played a significant role in the DOJ’s failed attempt to stop AT&T’s acquisition of Time Warner.

“These changes could lessen competition in the video programming market and limit choices for many thousands of consumers in Maine and millions more across the nation,” Collins wrote in a letter to Delrahim as reported by CNBC.

“I encourage both of you to seek a win-win solution and consider all options to keep Starz programming on the air,” Feinstein wrote in a separate letter.

Comcast is employing strategy out of Dish Networks’ playbook, which typically includes threats to halt access to third-party content distribution for more favorable distribution terms. Indeed, Dish currently has HBO blacked out to it subscribers.

Comcast, like Dish, contends its subs can access services such as Starz and HBO independently, thus negating what it considers to be excessive carriage fees.

“At the end of the day, this is a routine commercial negotiation that raises no conceivable antitrust concerns,” Comcast said in a statement.

Starz countered that Comcast is forcing its subs to pay more for its service.

“By unilaterally taking Starz out of its packages with no refund … Comcast is unfairly depriving them of relatable programming that reflects their cultural experience,” read a Starz statement.

Lionsgate reports third-quarter (ended Sept. 30) financial results Nov. 7.

 

AT&T Reportedly Considering Spinning Off DirecTV or Merging Unit With Dish Network

Facing mounting mergers-and-acquisition debt, criticism from an activist investor and changing consumer habits toward pay-TV, AT&T is reportedly considering spinning off its DirecTV subsidiary or combining it with competitor Dish Network.

The Wall Street Journal, citing sources familiar with the situation, said CEO Randall Stephenson is exploring the option despite telling an investor event this week he still the supports the satellite TV business AT&T acquired in 2015 for $49 billion.

While nothing could come of the situation, Dish co-founder/CEO Charles Ergen Sept. 17 told the same investor group he welcomes merging the two satellite providers. Ergen tried pursuing DirecTV in 2014, but lost out to AT&T.

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Indeed, with 12 million subscribers — largely buttressed by standalone online TV service Sling TV — Dish would benefit from consolidation. AT&T has projected it would lose more than 1.4 million satellite subs in 2019, including rebranded DirecTV Now (AT&T TV) online subs.

However, when the former parents of Dish and DirecTV considered merging in 2001, federal regulators quashed the idea on antitrust issues.

The Trump Administration is still licking it wounds from a failed attempt to block AT&T’s acquisition of Time Warner — a move some observers contend was largely based on politics involving the president’s dislike of Time Warner subsidiary CNN.

How that would impact a Dish/DirecTV combination is anyone’s guess.

“From a regulatory perspective, it hasn’t been successful and I don’t know that there is any change in that regulatory perspective,” AT&T CFO John Stephens said recently. “I understand the industrial logic, but quite frankly it’s been tried and has been rejected.”

DOJ Puts Oscars on Notice Regarding Streaming Video

The Justice Department reportedly has contacted the Academy of Motion Pictures Arts and Sciences — the organization that runs the Academy Awards — about potential new rules that would restrict original movies distributed via streaming video channels (i.e. Netflix) from awards consideration.

First reported by Variety, DOJ antitrust boss Makan Delrahim March 21 sent a letter to Academy CEO Dawn Hudson saying any new rules put in place to restrict streaming video services from consideration could be viewed as anticompetitive.

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“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,” Delrahim wrote, as reported by Variety.

At issue are select original movies from Netflix, which the streaming pioneer submits for awards (including Best Picture) without a traditional 90-day theatrical release.

Netflix’s Roma was nominated for 10 Academy Awards, winning three, including Best Director, but losing Best Picture to Green Book.

The Oscar organization, in a media statement, confirmed receiving correspondence from the DOJ and responding accordingly.

“The Academy’s Board of Governors will meet on April 23 for its annual awards rules meeting, where all branches submit possible updates for consideration,” a representative from the Academy said in a media statement.

Delrahim previously tried unsuccessfully to quash AT&T’s $85 billion acquisition of Time Warner, which led to the formation of WarnerMedia.

 

 

 

 

 

Appeals Court Denies DOJ Bid to Block AT&T’s $85 Billion Time Warner Purchase

A federal appeals court Feb. 26 ruled against the Justice Department’s attempt to block AT&T’s $85 billion acquisition of Time Warner, which led to the formation of WarnerMedia.

The court found that a lower court judge’s decision last summer approving of the transaction did not violate antitrust guidelines.

“The judgment of the district court appealed from this cause is hereby affirmed,” the court wrote in its ruling.

The Justice Department had argued that the merger would enable AT&T, which also owns DirecTV, to leverage its stake in the satellite operator to force pay-TV competitors to pay more for content from Warner Bros., HBO and Turner, which includes CNN.

Some observers speculated the government’s attempt to block the deal revolved more around President Trump’s openly hostile approach to CNN, which he has labeled “fake news,” and, along with other media outlets not named Fox News, an “enemy of the people.”

Indeed, the DOJ’s legal challenges represented the first to a corporate vertical merger in four years.