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  • Under the Electric Cloud:Cinema at Paramount's Twilight
  • Peter Labuza (bio)

Hollywood's antitrust regime finally died in June 2020 as the landmark decision, United States v. Paramount (1948), made its way off the books. As well rehearsed in undergraduate film history lectures, the famed Supreme Court decision and subsequent consent decrees broke the studio system by essentially splitting producers from exhibitors and fundamentally changing how the film industry made movies. Though its effect has withered over the decades, Assistant Attorney General Makan Delrahim, appointed by former President Donald J. Trump, succeeded in putting the last nail in the coffin.1 After making a splash across Hollywood with his announcement in 2019, the Department of Justice (DOJ) returned one last time to the Southern District of New York where exceptions and permissions to the decrees had been granted for over half a century.2 In her opinion, Judge Analisa Torres declared, "Because the Decrees ended the collusion and required the Major Defendants to separate their film distribution and theater operations, and the industry no longer uses sequential theatrical runs, it is unlikely that any collective attempt by Defendants to once again monopolize the theater market would or could reoccur."3 Her opinion admitted what the industry knew for decades: enforcement of the decrees had become obsolete in their ability to regulate the film industry.4 Majors like RKO Radio Pictures and Metro-Goldwyn-Mayer barely exist, and the transformation of digital streaming has largely made theatrical investments obsolete. Despite pleas from independent theater owners, Torres reasoned that removing the decrees would do little to harm the market for movies.5

But antitrust is not dead. Once considered by historian Richard Hofstadter [End Page 242] "exclusively the concern of a technical elite of lawyers and economists," a new populist rhetoric has embraced the century-old legal tool.6 From the presidential campaigns of Senators Bernie Sanders and Elizabeth Warren to the first major Congressional investigations in over a decade, the "Break 'Em Up!" ethos of antitrust has returned in full swing. Numerous "antitrust hipsters" are transforming the scholarship and taking positions within President Joseph R. Biden's administration, while field-shifting litigation against Apple, Google, and Facebook sits in the courts that might reshape how we analyze "bigness." Though the energy has focused on Big Tech and the digital marketplace, the shift in studios toward integrated streaming platforms such as Disney+, Paramount+, and HBOMax should put them under scrutiny. In fact, the future of this discipline may very well depend on such action.

This article traces why antitrust will—and should—play a role in the future of cinema. As the streaming transition continues and accelerates during the COVID-19 pandemic, these companies are ripe for a substantial antitrust investigation to demonstrate how they control the market. This is not only an issue of where "good" movies will come from but a critical course correction for issues of access, labor, and even the financial health of the industry. As Paramount paved the way for the transformative landscape of cinema of the 1950s and 1960s—with its mix of blockbusters, art films, social problem movies, teen flicks, and eventually the New Hollywood—a new antitrust regime could produce a similar effect that would oppose today's concentration. To build a better future for the movies, antitrust provides us a hammer to tear down the decrepit foundation.

Khan Law

In the popular culture sense, virality is not typical for legal scholars. But antitrust law had its own moment of a new star emerging with the publication of "Amazon's Antitrust Paradox" and its author, Lina Khan.7 Inspired in part by Ida Tarbell's famed examination of Standard Oil, the author explored how nothing in Amazon's multi-structured business violated the norms of what had been considered antitrust policy.8 Instead, she suggested rethinking how digital marketplaces shape competition and swallow industries whole. In doing so, she challenged what has been the base assumption and core institution of antitrust for almost four decades: the consumer welfare standard and the Chicago School of Economics.

While popular movements in the 1960s often turned a suspicious eye toward corporations transforming into conglomerations—including those...