NORTHERN DISTRICT OF CALIFORNIA — The Walt Disney Company has agreed to pay $50 million to settle a class action lawsuit. The settlement resolves claims that Disney forced live-TV streaming services to increase their prices.

Four YouTube TV subscribers filed a class action complaint against Disney in November 2022 in the U.S. District Court for the Northern District of California. The complaint accused Disney of entering anticompetitive agreements with YouTube TV and other companies that provide access to broadcast channels via the internet, as mentioned in a media interview. These agreements allegedly forced over-the-top live TV services to cost more by requiring distributors to include ESPN with their base packages.

The complaint argued that the pricing of ESPN and Hulu + Live TV, both Disney-owned, drove up prices across the industry. It claimed that carriage agreement mandates allowed Disney to use ESPN and Hulu to establish a price floor in the streaming live pay TV market. The base package for YouTube TV, for example, reportedly increased from $35 to $65 after Disney-owned channels were added. During a 2021 carrier dispute, YouTube TV stated that its base plan would be $15 cheaper without Disney-owned channels.

The parties reached a settlement agreement in March, and the court preliminarily approved it in the same month. A final approval hearing for the settlement is scheduled for January 14. Under the terms of the settlement agreement, Disney admits no wrongdoing. The company has agreed to consider offering distributors the option to provide fewer Disney-owned channels, including ESPN, for three years following the final approval of the settlement. However, the agreement does not mandate Disney to offer more affordable or smaller bundles of its channels.

Customers eligible for the settlement are those who purchased a YouTube TV, DirecTV Stream, DirecTV Now, or AT&T TV Now subscription between April 1, 2019, and March 31, 2026. Disney reported a total segment operating income of $4.6 billion in its most recent fiscal quarter.