Conservative Lies

Obama Wants to Shut Down Hulu for Antitrust Violations

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As this is the site’s first real post of substance, we’ll start small . . . .

Conservative Lie: Obama wants the Justice Department to shut down Hulu (or, alternately, make it a pay site) because he considers it to be in violation of anti-trust laws.

The Truth (condensed): Obama has never taken, nor plans to take, any action against Hulu.com (and the same goes for his Justice Department).  Should he decide to take action in the future, finding Hulu in violation of any anti-trust laws would be difficult, if not impossible, due to their market position.

The Truth (expanded):

When Obama was still campaigning for President in May of 2008, he voiced his interest in investigating anti-competitive practices, specifically in the media industry.  He announced that the Justice Department under his administration would be active in this regard, and went on to criticize the activity of the Bush administration:

“We’re going to have an antitrust division in the Justice Department that actually believes in antitrust law. We haven’t had that for the last seven, eight years.”

Later, in June, he made further comments in an interview with Broadcasting & Cable Magazine:

“Under current rules, the media market is dominated by a handful of firms. The ill effects of consolidation today and continued consolidation are well-documented—less diversity of opinion, less local news coverage, replication of the same stories across multiple outlets, and others. We can do better.”

Soon afterward, conservative apologists started writing articles attempting to mislead readers that Obama might be breaking up, stopping, or regulating Hulu.com in some way.  The authors argue that if Obama is going after media companies that engage in anti-trust violations, and Hulu.com is a media company, then everyone should be afraid that Hulu.com might disappear or ask users to pay.

Cord Blomquist, in a techliberation.com article, wrote:

“The outlook looks especially bad for Hulu considering the Obama administration’s stance on competition policy for the media sector in particular.”

And he wasn’t alone in his apparent concern. Steven Titch, in his Reason.org blog, wrote:

“Likewise, Hulu, which by virtue of moving quickly in the emerging area of video streaming, has locked up some large exclusive content deals plus financing from Disney, NBC Universal and News Corp., may find itself in legal trouble simply for not slowing down to allow its competitors to catch up. Hulu, of course, is free, but monetizes its exclusivity through online advertising. Let alone the fact that business models for online advertising and content  are still shaking out and someone may yet develop a new approach between now and the time you finish reading this blog post, the Feds appear ready to clamp down.”

Bloomquist and Titch’s words sound ominous but fail to take into account that Hulu is not, in any way, a monopoly.  Nor are they otherwise participating in anti-trust behavior.  Nearly every major TV network runs it’s own streaming video service.  Add to that the Amazon and iTunes marketplaces, where customers may rent or purchase (and then watch) movies and television shows online.  These authors imply Hulu to be the only place to go for TV online, and that implication is totally contrary to reality.

Further, the Justice Department never named Hulu.com as a target for scrutiny. The only reason Hulu’s name comes up regarding the subject is because Bloomquist, Titch, and others erroneously lump it together with companies the Justice Department might conceivably have their eye on.

The alternate version, that Obama and his administration may force them to become a pay site, may have gained a little momentum Hulu’s plans to include a pay component to their site in the near future.   But, at no point has Hulu said anything about government intervention into it’s business.  By the way, ‘inside sources’ reassured Entertainment Weekly that Hulu’s pay component would only be an addendum to (and not a replacement of) their free site.

At this point the trail is hard to follow.  How did it grow beyond a few internet articles?

Speculation Regurgitation.

Conservative pundits, ever in need of ways to criticize a Democratic President, simply echoed these baseless concerns without regard to their veracity.  No one had to state as a fact that Obama will regulate Hulu in order for the trope to reach your ears.  They only had to comment that “people are concerned” Obama might regulate Hulu.  Suddenly, there is ‘an issue’, and there are ‘questions to be answered.’  Soon, the mere presence of the idea leads people to believe the concern is real.

As such, you may have heard the idea that Obama would like to shut down Hulu from a cable news station, the radio, your friend, your conservative aunt, etc.

Now that you know the origin, you know the truth.

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Written by conservativelies

November 11, 2009 at 8:35 pm

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