Disney in Hot Water in South Korea for Allegedly Violating Antitrust Laws 
Wed, April 21, 2021

Disney in Hot Water in South Korea for Allegedly Violating Antitrust Laws 

Disney’s dominance in the film industry has been the topic of conversation for many film aficionados. There is no one time that Disney does not have a feature out or will soon have one, and in box-office performance / Photo by: Roberto Evangelisti via 123RF

 

Disney’s dominance in the film industry has been the topic of conversation for many film aficionados. There is no one time that Disney does not have a feature out or will soon have one, and in box-office performance, it’s more common to see one Disney film competing with another rather than with other movies from other production studios.

What with Disney inking a billion-dollar deal with 20th Century Fox, launching Disney+, and continuing on with their franchise movie models, not to mention having in its pocket a little studio called Marvel that is the proud producer of the newest all-time, highest-grossing movie, it’s easy to understand how the company’s dominance over the industry is quickly being labeled as a monopoly now. In South Korea recently, they were even sued for allegedly breaking antitrust laws by taking control of a large number of cinemas in the country. 

 

The Violation

What exactly are South Korean groups saying about Disney’s violation? According to American multinational business magazine Fortune, the allegation was brought forward by a Seoul-based civic and NGO group called Public Welfare Committee that “filed a complaint against Walt Disney Korea through South Korea’s Central District Prosecutors’ Office.” Their hope was that South Korean authorities would call for an investigation in the matter. 

PWC alleged that Disney’s latest movie, “Frozen 2,” released in more than 88% of South Korean cinemas was the right ground to launch an investigation, especially since 88% clearly surpassed the 50% of screenings that a film should only have in the country to ensure that competition was alive and well. The PWC also said that this was to give the audience choices in what to watch and to avoid the monopolistic powers of just one production studio. 

The PWC said that Disney “attempted to monopolize the screens and seek great profit in the short term, restricting the consumer’s right to choose.” Unfortunately for the group, while these complaints seem overall valid, South Korean law does not currently have a limit on how much exposure or screen appearance a film can have at any given moment, although the complaints are moving politicians into thinking that perhaps there needs to be something done about it. 

In a corresponding report by British news source Telegraph UK, the South Korean Ministry of Culture, Sport, and Tourism is actually thinking of instituting some sort of cap that one film can have, but that announcement is also unsettling some multiplex owners. 

In South Korea recently, they were even sued for allegedly breaking antitrust laws by taking control of a large number of cinemas in the country / Photo by: Panya Khamtuy via 123RF

 

Two Sides: Cineplexes vs. Filmmakers

Just like in every situation, if the South Korean authorities eventually settle with putting a cap on the number of cinemas Hollywood heavyweight movies can occupy during their release, two kinds of groups are on opposing sides of the decision. 

On the pro side are, of course, local and independent filmmakers who rely on competition to make sure that the audiences have better options of what film to watch. Fortune mentioned that those filmmakers are in favor of this bill because all they want is to dispel the “existential threat to the idea of a homegrown Korean film industry that is posed by imported Hollywood blockbusters.” 

This much is true already, considering “Frozen 2” has already collected $61.2 million in Korea on its first outing. That’s already a big enough number considering South Korea's population is just 51 million. 

On the con side are multiplex owners decrying the decision, saying that, as established businesses, it is important that they get to decide on movie caps while considering market demands. Basically, multiplex owners are saying that this is what people want and that, to a certain extent perhaps, cinema owners should be allowed to give people what they want. 

It’s a not-so bizarre fork-in-the-road situation because Disney has had to deal with enough antitrust complaints (and will probably face more in the future) on their growing monopoly. 

Matt Stoller, author of “Goliath: The Hundred Year War Between Monopoly Power and Democracy,” said it better in his lengthy website entry, “It’s Time to Break Up Disney”: "The new Disney is more a private equity group than studio, collecting brands and using them to bargain aggressively with partners, suppliers, and consumers. Imperial Disney is the result not of animation genius but mergers and acquisitions genius. It is not a corporation that pushes the bounds of artistic and technological possibility but a corporation that pushes the bounds of legal possibility."

Inconsistencies 

Perhaps existing inconsistencies with records also hamper the urgency for investigation. While the PWC claimed that 88% of Korean cinemas are being flooded by the foreign film, data from the Korean Film Council painted a different picture, stating that, after calculations, the movie is actually only shown in 46.3% of the country’s total screens, about four points short of the 50% cap.

The different metrics definitely threw a wrench in the list of claims suggesting that “Frozen 2” and Disney are breaking the law. This doesn’t mean, however, that any of the PWC claims are automatically disregarded. 

It doesn’t take a genius to figure out that Disney has perhaps taken a bigger slice of the proverbial cake as time went by. The entertainment website Cheat Sheet mentioned, though, that if “Frozen 2” is found to be guilty of the violation, it would certainly hurt Disney’s performance in South Korea, although it wouldn’t anywhere else. 
Already the film has brought in $288,845,131 in the United States and $453,215,336 worldwide, according to data by Box Office Mojo, a website that tracks box office revenue in a systematic, algorithmic way.

Monopoly, in any industry, will always be a contentious subject. Ultimately though, for movies and the entertainment sector in general, it will be the public that will decide on the one they will spend their hard-earned cash even if you offer them a myriad of choices.