GDC Claims Anti-Competitive Action By Dolby

Consolidation in the manufacturing sector was predictable with the massive drop in sales following the digital conversion boom. The largest of M&A activities in this sector was that of Dolby and Doremi. After years of failing to establish its own footprint of servers and media blocks, Dolby’s acquisition was necessary to claim market share, giving it claim to over 60% of the worldwide cinema market. At the time of acquisition, concern was raised that Dolby, a company whose early success in cinema was built on a monopoly in noise reduction and matrix decoding, would abuse its new market power through what can be politely termed its “culturally monopolistic behavior.” This month, GDC Technology, Dolby’s largest competitor in cinema media blocks and servers, filed a complaint in US District Court against Dolby for an improper claim of copyright protection on the API of Dolby’s media block. GDC may have reason to engage in a dispute, but it appears to have picked the wrong one.

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