TORONTO — Records on Wheels, a small Toronto-based CD, video and DVD distributor, is suing the Canadian division of 20th Century Fox Home Entertainment for C$65 million ($44.2 million) for refusing to do business with it.
“We’re going to make a strong impression in DVD, so we need the Fox line,” said ROW founder and president Vito Ierello, adding that his company buys from most of the other majors.
Fox dropped ROW and several other distributors from its client list in 1997. Ierello says that when he asked why, he was told the company was too small. ROW’s sales that fiscal year were $18.8 million, and documents released as part of the suit indicate that as a Fox customer, ROW is closer to the middle of the pack in Canada.
“So it doesn’t make sense,” Ierello emphasized. He says he appealed to the Canadian competition bureau to no avail. “I discovered the Canadian government was a toothless tiger.”
A row with Mouse
So the company launched the suit. In its statement of claim, ROW contends that Fox is in breach of the Canuck Competition Act, and that Disney (with which ROW has also had shaky trade relations), Astral (a Montreal-based company that used to compete with ROW but is no longer involved in video distribution) and Fox have conspired “to keep ROW out of the market in order to maintain higher prices.”
“No conspiracy exists between Fox and Walt Disney, Astral or anyone else to control or limit distribution of video cassettes in Canada,” Fox replied in its statement of defense. Fox also maintains that it is not obligated to trade with ROW and it is not in breach of the Competition Act.
A Fox rep in Canada said she cannot comment on pending litigation.
The two appeared in court Monday.”I don’t want to go to court with these guys,” said Ierello. “These guys are monsters.”