Court to RealNetworks: MPAA Is Not a ‘Price-Fixing Cartel’
RealNetworks claimed Hollywood studios and DVD CCA violated antitrust laws when they prevented the sale of products like RealDVD that enable fair-use copying of DVDs.
January 12, 2010 by Julie Jacobson

RealNetworks, whose RealDVD ripping software has so far been deemed illegal, recently lost an antitrust claim against the studios.

In May 2009, RealNetworks filed a claim against the Motion Pictures Association of America (MPAA), the organization that initially sued to keep RealDVD off the market.

Real argued that the MPAA, which represents Hollywood studios, illegally conspired with the studios to craft the Content Scramble System (CSS) licensing agreement – an agreement that prohibits the sale of products that facilitate fair-use copying of encrypted DVDs.

Also named in the antitrust suit was the DVD Copy Control Association (DVD CCA), which licenses the CSS code.

Under the aegis of the MPAA and DVD CCA, the studios are a “price-fixing cartel,” Real claimed.

Judge Marilyn Hall Patel on Friday struck down that argument, according to Wired:

“Real’s purported injury stems from its own decision to manufacture and traffic in a device that is almost certainly illegal under the DMCA [Digital Millennium Copyright Act],” Patel wrote.

In other words, Real’s injury was a result of its own wrongdoings – circumventing CSS technology—not from illegal cartel activity among the Hollywood set.

For that reason, Patel did not need to decide whether the studios do in fact violate antitrust laws.

So RealNetworks lost round one of the antitrust battle. In the meantime, the company is appealing Judge Patel’s ruling last year that prevents the company from selling RealDVD.

That decision is not expected for at least a year.

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Julie Jacobson - Editor-at-large, CE Pro
Julie Jacobson is co-founder of EH Publishing and currently spends most of her time writing for CE Pro, mostly in the areas of home automation, networked A/V and the business of home systems integration. She majored in Economics at the University of Michigan, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. Julie is a washed-up Ultimate Frisbee player with the scars to prove it. Follow her on Twitter @juliejacobson.

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