DGA Opposes Justice Department Effort To End Paramount Consent Decrees

Ted Johnson

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The Directors Guild of America is opposing a Justice Department effort to end the 70-year-old Paramount consent decrees, which placed restrictions on studio control over theatrical exhibition.

The DOJ asked a court last month to terminate the decrees, put in place in 1948 after years of antitrust litigation. It led major studios at the time to divest their ownership of theater chains, and was one of the factors that led to the demise of the studio system in Hollywood’s golden age.

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In their statement, the DGA said that “In this new Gilded Age, the Department of Justice’s recent move to end the Paramount Consent Decrees is a step in the wrong direction. While the motion picture and television industry has changed in the 70 years since the first Decree was signed, many of those changes – precipitated by new tech giant entrants – call for greater, not lesser, antitrust oversight.

The DGA added, “To defend competition in the motion picture marketplace, the DOJ must combat predatory and monopolistic practices. Fair competition is especially imperative for both independent films and small and independent theaters. Most importantly, a fair and robust market ensures our members and other creators have the widest possible opportunities for work, and audiences who want to enjoy the experience of seeing a motion picture in a theater have access to the very best and most diverse content no matter where they live.”

The DGA said that it would continue to monitor the issue. The DGA joins the Writers Guild of America, West in expressing misgivings about terminating the consent decrees, which also prohibit such practices as block booking and circuit dealing. The WGAW filed comments during a DOJ review period last year in which it said that the DOJ “should continue to use all of the tools at its disposal to prevent or fight against anticompetitive practices in this market.”

The DOJ’s Antitrust Division argues that the consent decrees are long out of date, and that lifting them will lead to more experimentation about distributors and exhibitors to account for changes in technology and consumer habits. A federal judge still has to sign off on the termination. Makan Delrahim, the Justice Department’s antitrust chief, also said that it would continue to act on anticompetitive conduct without the decrees in place, scrutinizing business practices using the “rule of reason.” The DOJ also said that they will establish a two-year sunset period for lifting the prohibition on block booking and circuit dealing.

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