Banning Netflix from Oscars could break law, DoJ warns

Key Points
  • Streaming giant Netflix has faced backlash over its Oscar nominations.
  • Pressure on its inclusion in the annual Academy Awards has been growing.
  • Now, the Department of Justice suggests that the organization could be violating antitrust law if it attempts to exclude Netflix.
Olivia Colman accepts the Actress in a Leading Role award for 'The Favourite' onstage during the 91st Annual Academy Awards at the Dolby Theatre on February 24, 2019 in Hollywood, California.
Matt Petit - Handout/A.M.P.A.S. | Getty Images Entertainment | Getty Images

The Academy of Motion Picture Arts and Sciences has received a letter from the Department of Justice suggesting the organization could be violating antitrust law if it attempts to exclude Netflix from the Oscars.

The letter, first published by the entertainment magazine and website Variety, warns Academy CEO Dawn Hudson that changes to Oscar eligibility rules could "suppress competition."

Netflix's production "Roma" won three Oscars at this year's Academy Awards but multiple Oscar-winning filmmaker Steven Spielberg — who is also a member of the Academy's board of governors — is an outspoken critic of Netflix's inclusion in the glitzy ceremony.

Spielberg has said Netflix films should be considered as made for TV productions and thus should be included in the annual Emmy Awards for the television industry. He is reportedly pushing others on the Academy's board to help force an eligibility change.

Alfonso Cuaron wins Best Director Motion Picture and Best Motion Picture - Foreign Language for "Roma," a Netflix film, during the 76th annual Golden Globe Awards on January 6, 2019, at the Beverly Hilton hotel in Beverly Hills, California.
Mark Ralston | AFP | Getty Images

The DOJ letter dated March 21 from antitrust chief Makan Delrahim warned that any eligibility requirements that did not have a "procompetitive justification" could "raise antitrust concerns".

"If the Academy adopts a new rule to exclude certain types of films, such as films distributed via online streaming services, from eligibility for the Oscars, and that exclusion tends to diminish the excluded films' sales, that rule could therefore violate Section 1."

A source familiar with the situation said Netflix didn't know about the DOJ letter until Variety reported it and that Netflix was not in touch with the DOJ.

The Academy and the DOJ did not immediately reply to CNBC's requests for comment.

For more on this story, see Variety's full story.

Correction: Netflix was misspelled in a previous headline.

--CNBC's Julia Boorstin contributed to this report.