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Fox asks court to dismiss Redbox suit

October 2, 2009 |  7:00 am

KodqefncREDBOX 20th Century Fox asked a federal district court in Delaware to dismiss the civil suit brought by Redbox, claiming that the antitrust claims raised by the maker of DVD-rental kiosks don't hold up under scrutiny.

Redbox sued Fox on Aug. 11 after the studio asked DVD wholesalers to wait 30 days after a new release before selling to the kiosk operator, putting it at a disadvantage compared with other rental outlets. 

In documents filed Thursday, Fox picked apart Redbox's lawsuit, saying it failed to show how the studio's new approach to kiosks injured competition for DVD rentals. It notes that Redbox struck distribution agreements with three competing Hollywood studios -- Sony Pictures Home Entertainment, Lionsgate and Paramount -- that together represent more than 45% of the DVD market.

 "Redbox does not, and cannot, allege that Fox's distribution policy has any effect at all -- let alone an anti-competitive effect -- on the retail rental of DVDs from the many other studios that compete with Fox," the studio wrote in its filing. "Rather, Redbox only alleges that Redbox and its customers will be inured because Fox's distribution policy allegedly 'prevent(s) customers from renting new release Fox DVDs from Redbox and other rental kiosks."  

Fox also says Redbox hasn't been precluded from buying newly released DVDs -- only that the DVDs can't be obtained through normal wholesale channels. The vendor could obtain movies from retailers such as Best Buy and Wal-Mart or from Fox directly.

"Absent factual allegations that Redbox is foreclosed from obtaining Fox DVDs, Redbox cannot assert that it has been injured -- let alone that market-wide competition is injured," it said.

Redbox issued a statement saying it is confident in its legal position and the merits of its case.

"20th Century Fox continues its pursuit to prohibit consumer access to new release DVDs at affordable prices," the company said. "Redbox remains steadfast in our commitment to protecting consumers’ rights and to providing our customers the DVDs they want, where they want and at the low price they want."

-- Dawn C. Chmielewski

Photo: Redbox DVD rental kiosk. Credit: Justin Sullivan / Getty Images

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