The Justice Department’s Anti Trust Division is investigating Regal Entertainment Group (RGC) and AMC Entertaiment Holding (AMC). The two national movie theater chains are under scrutiny for what has been described as ‘potentially anti competitive conduct’. The Justice Department is looking into the Movie chains’ use of ‘clearances.’ The industry practice allows theaters to make deals with studios that secure exclusive rights to certain movie titles. The tactic can be used to crush smaller, competing theaters. Both Regal Entertainment Group and AMC Entertainment Holding say they do not feel they have violated antitrust laws and are co operating with government authorities. Independent theaters are hit hardest by the use of clearance deals which effectively bar them from screening new releases until much later dates. Large theater chains can refuse to play a studio movie in certain areas unless they have exclusive rights to do so. Much of the time this means that new, blockbuster releases can only be seen in chain locations. AMC, Regal Entertainment Group and Cinemark Holdings combined own over 40 percent of U.S. movie screens, giving them hard hitting negotiating power with Hollywood studios. The theater giants defend themselves by saying they only seek “clearance” for select titles and the practice is mostly to get an edge over each other rather than to crush small movie theaters.
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