The Walt Disney Co. and four other large U.S. companies agreed Monday to pay $5 billion to settle claims that they abused their dominance in the film industry to promote films that infringed on their intellectual property.
The deal, which included $2 billion in fines for violations, follows the announcement last week by the Justice Department and the U.K.’s Competition and Markets Authority that they had settled a similar case.
The settlement requires Disney to give its films and TV shows to “independently produced studios” who must get approval from the U and European Union, the U, U.A.E. and Japan and must submit them to auditions.
The agreement also requires Disney and its studios to set up a joint venture to distribute and market Disney films and shows.
It requires the agreement to include a “programmatic” payment that will be credited to the cost of the film or TV show.
The Disney-backed studios were accused of charging fees for TV shows and films that the studios say they were not charged for.
Disney argued that the fees were paid to filmmakers, who had been working on the films, and to studios that were in charge of the films.
The company said it is committed to a culture of transparency and a strong, collaborative culture at the company.
“We are taking a strong stance against abuse and abuse of the power of the studio system,” Walt Disney Group President Alan Horn said in a statement.
“This settlement is part of a broader effort to address the culture of abuse and the misuse of studios’ power to control the distribution of movies, TV shows, and other content.”
The agreement, which also included a $2.8 billion payment to Sony, will be made through an independent, non-profit corporation, which will be overseen by the UCC and the EU.
It does not require the UBS Group or the UGC to divest.
Disney said it has paid $2 million a day in settlements since it began the process in 2013, but the company said the average annual payment to Hollywood studios was just under $1 billion.
Disney said the settlement with Sony and its European partner will not affect the company’s current agreements with the studios.
“Disney is pleased to announce that it has agreed to settle with Sony,” Disney CEO Bob Iger said in the statement.
He added, “Our shared commitment to openness and collaboration is central to our business.”
Iger said the company has committed to more than $50 billion in revenue, and the settlement will ensure that it continues to be profitable.