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Karen Hoffman Lent and Kenneth Schwartz Karen Hoffman Lent and Kenneth Schwartz

Last month, the Department of Justice (DOJ) asked a federal district court to terminate the Paramount Consent Decrees (Decrees), a set of rules governing major film studios for the last 70 years. In effect, these rules prohibited movie studios from owning downstream movie theaters and banned a variety of vertical agreements, such as block booking—the practice of bundling multiple films into one theater license. This decision comes after the DOJ said last year that it planned to review almost 1,300 “legacy” antitrust orders to determine which are “outdated” and do little more than “clog court dockets, create unnecessary uncertainty for businesses or … elicit anticompetitive market conditions.” See DOJ Office of Public Affairs, Department of Justice Announces Initiative to Terminate “Legacy” Antitrust Judgments (April 25, 2018). Pursuant to that process, Assistant Attorney General of the DOJ Antitrust Division Makan Delrahim explained that the DOJ found that the 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 greatest creative films.” See DOJ Office of Public Affairs, Department of Justice Files Motion to Terminate Paramount Consent Decrees (Nov. 22, 2019). The DOJ emphasized that significant structural changes in the industry, coupled with technological innovations, new movie platforms, new business models, and changing consumer demands no longer make the Decrees necessary. Id. In other words, going to a movie theater is no longer the only way to see the newest film. Consumers can access movies from their homes with just a few clicks of their TVs, tablets, or phones. As a result of this drastic shift in the ways consumers access movies, the DOJ believes a change is needed in how the market is regulated.

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