Disney Faces Lawsuit Over Alleged Streaming TV Monopoly

Case Overview: A class action lawsuit accuses Disney of using its ownership of ESPN and Hulu to create a streaming TV monopoly and inflate prices for consumers.

Consumers Affected: Consumers who subscribed to streaming TV services, including FuboTV.

Court: U.S. District Court for the Southern District of New York

Disney used its ownership of ESPN and Hulu to inflate prices and suppress competition, violating federal antitrust laws, including the Sherman Act, a new lawsuit claims. 

The class action lawsuit, brought by a FuboTV subscriber, accuses the entertainment giant of anticompetitive practices in the live TV streaming market, claiming Disney’s tactics force streaming providers to carry ESPN and bundle it with other Disney channels, driving up costs for consumers and rival platforms alike.

Disney Accused of Using ESPN and Hulu to Inflate Streaming Prices

Cole Unger, a FuboTV subscriber from Baltimore, filed the proposed class action lawsuit alleging he paid inflated prices due to Disney’s conduct. 

Like millions of other consumers, Unger chose Fubo for its sports-centric offerings, but Disney’s control over sports broadcasting rights left Fubo with no choice but to include ESPN in its base package. This practice, known as “block booking,” forces consumers to pay for Disney’s channels even if they don’t want them. Unger claims this scheme resulted in higher prices for Fubo subscribers and profits for Disney.

Lawsuit Alleges Disney's Practices Violate Antitrust Laws

Disney’s strategy revolves around its dominance in sports broadcasting, primarily through ESPN, the lawsuit claims. To access ESPN, streaming providers like Fubo are required to carry and pay for additional Disney-owned channels, whether they want them or not. 

These terms are enforced through “Most Favored Nation” (MFN) clauses, which ensure no competitor can undercut Disney’s pricing. Disney also offers anticompetitive rebates to its own streaming service, Hulu + Live TV, giving it an unfair advantage over rivals.

The lawsuit claims these tactics effectively prevent streaming providers from offering cheaper, sports-focused packages, forcing consumers to pay higher prices across the board. The MFN clauses also dissuade Disney from lowering its prices since it would have to extend those discounts to all competitors. As a result, the entire streaming live TV market operates under inflated pricing controlled by Disney.

This isn’t Disney’s first brush with antitrust litigation. In July, a California federal judge rejected Disney’s attempt to dismiss a class action lawsuit alleging similar behavior. That suit, brought by subscribers of YouTube TV and DirecTV Stream, accuses Disney of using carriage agreements to artificially raise prices for live TV packages. The claims focus on Disney’s requirement that ESPN be included in the cheapest streaming bundles, regardless of consumer demand.

Other Companies Face Antitrust Allegations

Disney isn’t alone in facing antitrust allegations. Netflix and Facebook are under scrutiny for a reported market-dividing agreement that inflated Netflix prices and shared consumer data for Facebook’s ad revenue. 

Similarly, Visa is accused of overcharging businesses through its payment processing fees, and Valve, the company behind Steam, is allegedly inflating game prices by restricting discounts on other platforms.

In his lawsuit, Unger wants to represent people across the country who paid for a FuboTV subscription from January 1, 2021 through the present. He is suing for violations of the Sherman Antitrust Act, as well as under various state antitrust and consumer protections laws and is seeking damages, disgorgement, injunctive relief, fees, costs, and interest.

Case Details

• Lawsuit: Unger v. The Walt Disney Company
• Case Number: 1:25-cv-00375
• Court: U.S. District Court for the Southern District of New York

Plaintiffs' Attorneys

• Gregory S. Asciolla, Alexander E. Barnett, Jonathan S. Crevier, and John M. Shaw (Dicello Levitt LLP)
• Joseph J. DePalma, Mindee J. Reuben and Steven J. Greenfogel (Lite Depalma Greenberg & Afanador, LLC)

Are you a streaming TV subscriber? What are your thoughts on this lawsuit against Disney? Share your opinion in the comments below.