KNOXVILLE (CNN) – The U.S. Justice Department is investigating two of the nation’s biggest movie theater chains. AMC and Regal Entertainment revealed the news in regulatory filings Monday.
Investigators are looking to see if the companies used an anti-competitive practice known as “film clearances.” That’s when big chains tell movie studios they won’t screen certain films if competitors in their area also show the films.
Small, independent theaters say big chains use the technique to take away their business. It works because of the purchasing power that large theater chains have in Hollywood.
AMC runs nearly 5,000 screens nationwide, and Regal operates more than 7,000.
An independently owned Houston theater company accused AMC of using “film clearances” in an April anti-trust lawsuit. Viva Cinemas says the anti-competitive technique put them out of business.