Redbox Files Suit Against Disney's Home Entertainment Division
Kiosk service Redbox filed a lawsuit against Disney's Buena Vista Home Entertainment on Monday, allegedly due to the latter's use of "hard-knuckled tactics" to prevent the former from renting or marketing its DVDs, as well as to stop the selling of digital movie downloads.
According to Redbox, Disney is meddling with its relationship with its suppliers and customers by ruining the reputation of the kiosk service, pointing out Redbox's inability to resell digital movie copies. In the suit, the kiosk service claimed that Disney is interfering with Redbox's business by selling DVDs and digital copies of movies directly to consumers.
"Disney badly seeks to stifle competition and eliminate low-cost options in order to maximize the prices it and its retailers charge consumers. Stopping Redbox's sale of Disney products is a means to that end, which is an unhappy one for consumers," claimed Redbox in its lawsuit filed in Los Angeles' federal district court.
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Redbox also claimed that Disney has opposed the kiosk service since the beginning, making ways to interfere with its business. According to the company, Disney's home entertainment division previously claimed that their prices were too low so it threatened to make their titles only available to Redbox customers 28 days after their initial release. However, Redbox did not submit to Buena Vista's threat and ended up purchasing the titles at full retail prices instead. The kiosk service found combination packs of DVDs or Blu-rays with digital HD codes particularly cheap, but when the company started selling them separately at low prices, Disney once again made efforts to prevent Redbox from selling individually the inclusions of the digital combo packs.
Redbox further argued in its suit that Disney is harming Redbox's lawful sales of Disney digital movies, and the impact of this harm is not limited to the lost sales. "Redbox's entry into the digital market is being harmed as well. Because Disney is impending Redbox's ability to sell Redbox's lawfully acquired Disney digital movies, consumers are being dissuaded from looking to Redbox as a source of titles that are high in demand," argued Redbox.
Disney has yet to comment on the issue.
