Hosea H. Harvey
Abstracted from: Hosea H. Harvey, Race, Markets, and Hollywood's Perpetual Antitrust Dilemma, 18 Michigan Journal of Race and Law 1 (Fall, 2012) (286 Footnote)
This Article examines racially skewed outcomes in an unfamiliar context-- outside of the familiar rubric of traditional anti-discrimination regimes. Law scholars have not given adequate attention to a fairly significant problem: the fact that non-competitive markets fuel inefficient and racially-skewed outcomes beyond labor market distortions. Economic outcomes relating to production, creation, and distribution of goods and services are also affected. In these markets, where we see a form of anti-competitive racial impasse, how can we more easily determine whether racial inequities remain, what causes them, and how the law can reduce or eliminate them? The typical framework for analyzing such problems might rest in antitrust law, but typical antitrust frameworks rarely view market inefficiencies primarily through the lens of racial equality.
The difficulty in connecting antitrust law with the goal of remedying racially skewed market outcomes is underscored by a frank scholarly admission: “[T]here seems to be a widespread, implicit belief (at least among [W]hite males) that race and gender discrimination is not a serious problem” in markets defined by products and not workers. Accordingly, scholars have engaged in just a few studies of the role that race plays in structuring modern marketplace interactions between seller and buyer and the overall racially polarized structure of market movements within industries. The lack of credible information, particularly regarding the role of race in structuring decisions about what to sell and to whom, is troubling if one cares about remedying these market problems. The Article's empirical analysis and supporting contextual research regarding the market for Hollywood feature films suggests that racial differentials in marketplace outcomes, primarily in film distribution differentials, are caused in part by the anticompetitive nature of the market itself. Therefore, the goals of this Article are twofold: (1) to move further toward engaging antitrust scholarship with the empirical analysis of market-based racial inequities, and (2) to highlight an underdeveloped area of legal study--solving the harms resulting from markets where race plays an important, but difficult, to identify role in shaping market outcomes.
A brief few words on what this Article does not do. In any attempt to frame questions of racial bias within existing legal regimes, it is common to wrestle with core frameworks. For instance, one might explore the role of constitutional law or Title VII in providing a “solution.” This Article does not attempt this for a number of reasons detailed later, but which bear mention here. First, as the racial skewing studied here is related to a product, not a person, the Title VII regime is simply not a useful framework. Second, as the article is not (directly) concerned with employment or labor practices, it makes little sense to retread familiar ground. Finally, with respect to issues of casting and hiring and remedies that might result from racial discrimination, definitive and innovative solutions have been framed; the question has been much more thoroughly explored than is appropriate for the top-down analysis presented here.
When studying racial bias at the market-wide level, divorced from the framework of employment discrimination and related laws, the legal harm is a vexing question that must be addressed. In a traditional employer/employee dispute, a racially-biased outcome might occur when an individual suffers some sort of adverse job or labor action connected to his or her race. That action is a race-based harm that can be easily identified, but perhaps less easily proven. However, when studying racially-biased markets and industries, how might one assess who is harmed by racially biased or stratified outcomes? For this Article's purposes, if we imagine a “film” as a product, the “owners” of that product are primarily financiers, producers, and (often) production houses and studios. Thus, when that product suffers from some sort of racial bias in the marketplace, those owners suffer from a legal harm that antitrust law might be used to remedy.
This Article proceeds as follows: First, [This article] sketch an approach to studying the nexus between antitrust law, racially skewed outcomes, and market-wide inefficiencies. Next, [This article] trace the historical development of the Hollywood production and distribution system, with an eye toward the role that a lack of competition might play in structuring racially stratified outcomes. Then, [This article] turn toward the modern pre-video-on-demand (pre-VOD) era; specifically, [This article] explore the contextual role that race played in feature film distribution during the 1990s prior to the national rollout of services like Netflix. To complement this contextual analysis, [This article] gathered a dataset of demographic information pertaining to a wide variety of films distributed for general release during the 1990s. Through econometric modeling of race, distribution, and outcomes data, [This article] attempt to determine whether a racially skewed outcome is being caused by non-competitive market forces. The data shows that race is indeed a driving force of distribution decisions and likely rooted primarily in a lack of competition. However, such skewed outcomes must also be contextualized within a prior history of explicit racial preferences and/or racial animus. How might we solve this problem? [This article] conclude by attempting to answer that question; a comparison of traditional anti-discrimination remedies to market and antitrust law solutions in this market suggests the latter are more useful tools in the antidiscrimination toolbox.
The contextual and empirical analysis that follows reflects on a market that, given its emphasis on publicly reported data-driven outcomes, we may have previously assumed to be efficient. This assumption is false. Therefore, as the Article moves from history through data analysis and then to legal regimes designed to promote market competition, it ends retrospectively asking whether antitrust-based legal solutions could have been utilized to minimize racially skewed market outcomes. To fully understand the scope of the market problem, its impact over time, and the failure of law as a solution, we now turn to contextual analysis of the industry's competitive morass over the last century.
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Rethinking the nexus between industry consolidation and racially skewed market discrimination may prove more rewarding as a method to reducing racial inequality and disparities in commercial outcomes. As a first step in that direction, this Article presents initial evidence that competition in Hollywood, if it could be classified as such, has been limited and that limited level of competition results in both racially-skewed and inefficient outcomes. The net harm as a result of that lack of competition has been a persistent and unique form of racial inequity in market outcomes that has not been adequately remedied and shows (at least during the period studied here) little signs of abating. The long arm of antitrust law did force a small amount of industry change some seventy-odd years ago, but results since then suggest that the initial pro-competitive legal remedies failed to accomplish their objectives or simply caused a shift in industry organization leading to market domination by the major studios repackaged in slightly different forms. Evidence gathered for this Article makes clear that during the 1990s and earlier the industry was characterized by racial impasse in the film distribution process.
To test how the rapid change in technology and demand in recent years could change distribution outcomes, more study is needed. Therefore, having established a baseline from which one might begin to question marketplace efficiency and consider the role of market consolidation and antitrust law in promoting racial equality, future work building on this evidence might trace developments in the period 2001-10 that particularly focus on whether radical changes to the industry brought by technology and refined modeling reversed the trend of racially-biased outcomes shown here. In addition, such work might further explore, using consumer-level data, the role that individual racial preferences might play in structuring product markets and the extent to which corporations might steer products in an attempt to match or mimic consumer preferences. Finally, with the perspective of recent events (e.g., conditions imposed on the Comcast/NBC Universal merger), one might ask whether antitrust law has indeed finally begun to be recognized as an additional tool in the arsenal for achieving racial equality in commerce and across markets. But reflecting on Hollywood's first century and the lessons of the recent past might still lead one to conclude that the racial market skewing and inefficiencies identified in this Article might persist notwithstanding technological developments. If such skewing is to be remedied, history suggests that traditional anti-discrimination regimes are not the answer. Antitrust is an option. Perhaps advocates for equality in Hollywood may want to consider sharpening some new tools in their anti-discrimination toolbox.
. Assistant Professor of Law and Political Science, Temple University, James E. Beasley School of Law. Ph.D. (Stanford University), J.D. (Stanford Law School).