10 States Investigating Movie Theater Chains Over Antitrust Violations

You know how it’s almost impossible to ever see one of those big blockbuster films showing at the little movie theater down the street? That issue is largely the result of exclusive agreements between large theater chains and film studios that effectively prevent independent rivals from showing certain films. While these deals might be great for the bigger companies, they aren’t so awesome for consumers. And so, 10 state attorneys general are looking into whether or not the contracts used by Regal Cinemas, AMC Entertainment, and Cinemark constitute antitrust violations. 

Ohio Attorney General Mike DeWine confirmed the 10-state investigation into the chains’ exclusionary conduct that allegedly limits consumer choice, The Associated Press reports.

According to DeWine, the investigation centers on whether or not the movie theater companies have tried to stifle the business of independent movie theaters and nonprofit film centers.

The agreements, most common among large chains, limit the number of theaters allowed to screen certain movies in some locations, essentially keeping potential blockbuster films out of smaller competitors’ reach.

All three major U.S. theater chains – AMC, Regal, and Cinemark – have previously said that clearance agreements are a long-established industry practice that only affect a small number of locations. Additionally, they say the requests are only approved at the discretion of movie studios.

However, those opposed to the practice maintain that the contracts allow larger chains to flex their muscle and exert their substantial market power in order to drive new, smaller competitors out of the industry.

“All businesses should have a fair chance to compete,” DeWine said. “We’re investigating the movie theater chains because of concerns that smaller, independent businesses have been unfairly pushed out of the market.”

DeWine’s office declined to reveal the other nine states involved in the probe.

Word of a multi-state investigation into AMC, Regal, and Cinemark began to surface earlier this winter in company filings, the AP reports.

In July, Regal and AMC announced in Securities and Exchange Commission filings that they had received formal inquiries the Department of Justice seeking information regarding their use of so-called clearance agreements.

Ohio Attorney General Confirms Movie Theater Antitrust Probe [The Associated Press]

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