Disney, Redbox having it out over sales of movie downloads

Redbox is getting into digital movie downloads, but the move has caused a stir among competitors. (Redbox)

After Disney late last year sued Redbox to block the sale of digital movie downloads, Redbox is answering back by accusing Disney of being anticompetition and anticonsumer.

At the core of the argument is Redbox’s sales of the digital download codes that accompany the DVDs and Blu-rays it buys for distribution from its kiosks. Last December, according to Variety, Disney sued Redbox to stop the company from selling the download codes through its kiosks. Disney alleged that Redbox only has the right to distribute the physical DVDs and Blu-rays and that in many cases, the download codes specifically bar against resale or transfer.

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Redbox, in its defense, claimed that the “first sale doctrine” doesn’t allow a copyright holder to block a purchaser from reselling a copy of the work. Redbox further argues that Disney wants to stifle competition as it prepares to launch its own branded streaming service and sell digital copies of its films through retailers including iTunes and Google.

“Plaintiffs seek to stifle competition to more smoothly launch Disney’s own digital content streaming service, maximize the price other services like iTunes and Amazon (and their customers) pay for Disney movies, and secure a greater market share for Hulu—the viewing service Disney will control as part of its $52 billion acquisition of 21st Century Fox,” said Redbox’s attorney Michael Geibelson, according to the complaint obtained by Variety.