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Online movie service sues studios
Intertainer files federal antitrust suit against AOL Time Warner, Sony and Vivendi Universal
September 24, 2002: 11:22 AM EDT

NEW YORK (CNN/Money) - A company that distributes movies online has filed a federal antitrust suit against three major film studios, according to a published report.

The Wall Street Journal reports that Intertainer Inc. named the film units of AOL Time Warner Inc. (AOL: up $0.07 to $12.08, Research, Estimates), Sony Corp. (SNE: down $0.66 to $40.84, Research, Estimates) and Vivendi Universal SA (V: down $0.11 to $11.89, Research, Estimates) in its suit filed in U.S. District Court in Los Angeles. AOL Time Warner is parent company of CNN/Money.

The suit charges the three companies used their online movie joint venture, called Movielink LLC, to push up the price they demand for licensing their movies to online distributors. The paper said the suit comes as the U.S. Justice Department is conducting its own investigation into movies-on-demand ventures. Movielink was also named as a defendant. The Journal said the three companies and Movielink declined to comment on the suit.

The suit charges that AOL Time Warner and Vivendi Universal breached agreements with Intertainer, while Sony, which is an investor in Intertainer, breached its fiduciary duty to the company. It said the studios have tried to renegotiate or replace terms of licensing agreements with Intertainer, seeking 60 percent of revenue collected from consumers rather than a 50-50 split.

Intertainer's other investors include software provider Microsoft Corp. (MSFT: up $0.14 to $45.37, Research, Estimates), chip maker Intel Corp. (INTC: up $0.47 to $14.60, Research, Estimates), and NBC, a unit of General Electric Co. (GE: down $0.51 to $25.89, Research, Estimates).  Top of page




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