Cablevision information antitrust go well with towards Viacom over programming bundling
Fan of channels similar to CMT, VH1 Basic and Teen Nick? Cablevision is assuming that is a negatory. At this time, the cable supplier filed a federal antitrust go well with towards Viacom over the content material distributor’s programming bundling practices, that are alleged as anti-aggressive. The lawsuit revolves round Viacom’s insistence that ancillary networks be included in programming agreements in an effort to achieve distribution rights to extra fashionable networks comparable to Nickelodeon, MTV and Comedy Central. Whereas the grievance itself stays beneath seal, Cablevision is arguing abuse of energy within the lawsuit, which if profitable, might have rippling results all through the pay-TV business.
Cablevision is looking for declaratory aid that might void the 2 corporations’ programming contract (inked simply this previous December), together with a everlasting injunction towards Viacom’s apply and the power to hold Viacom programming till a brand new contract could be negotiated. In the meantime, Viacom has asserted that it will vigorously defend the lawsuit, and maintains that its apply is “win-win and professional-shopper” within the sense that its area of interest networks are provided at reductions. It appears that evidently we will look ahead to each corporations butting heads for some time to return.
Cablevision Information Federal Antitrust Lawsuit Towards Viacom For Illegally Forcing Buy Of Programming Providers
BETHPAGE, N.Y., Feb. 26, 2013 /PRNewswire/ — Cablevision Techniques Company (NYSE: CVC) filed an antitrust lawsuit right now towards Viacom (NYSE: VIA), in federal courtroom in Manhattan, for illegally forcing Cablevision to hold and pay for 14 lesser-watched ancillary networks its clients don’t need, akin to Palladia, MTV Hits and VH1 Basic, so as to carry should-have networks similar to Nickelodeon, MTV and Comedy Central.
Commenting on the lawsuit and Viacom, Cablevision provided the next assertion:
“The way through which Viacom sells its programming is prohibited, anti-shopper, and fallacious. Viacom successfully forces Cablevision’s clients to pay for and obtain little-watched channels to be able to get the channels they really need. Viacom’s abuse of its market energy shouldn’t be solely unlawful, but in addition prevents Cablevision from delivering the programming that its clients need and that competes with Viacom’s much less widespread channels.”
Cablevision’s go well with contends that:
Viacom abused its market energy over commercially important networks, together with should-have networks corresponding to Nickelodeon, Comedy Central, and MTV, to coerce Cablevision into carrying the 14 far much less in style ancillary channels. Viacom coerced Cablevision by threatening to impose large monetary penalties until Cablevision complied with Viacom’s calls for. Viacom’s conduct harms Cablevision and its clients, and impairs competitors by making Cablevision pay for and carry networks that many subscribers don’t need to watch, whereas different networks are excluded from distribution, stopping Cablevision from with the ability to differentiate its providers and harming subscribers. Cablevision’s grievance asserts that Viacom engaged in a “per se” unlawful tying association in violation of the federal antitrust legal guidelines. Cablevision’s antitrust lawsuit additionally asserts that Viacom has engaged in illegal “block reserving,” which is a type of tying that circumstances the sale of a package deal of rights on the purchaser’s taking of different rights. Viacom’s conduct additionally violates the Donnelly Act in New York State Regulation, which parallels federal anti-belief legal guidelines.
The grievance was filed beneath seal and a public model is just not but obtainable.
Cablevision is in search of quite a lot of cures together with:
Declaratory aid voiding the December 2012 carriage settlement. A everlasting injunction barring Viacom from conditioning carriage of all or any of its core networks on Cablevision’s licensing all or any of Viacom’s ancillary networks. To effectuate the everlasting aid, a requirement that Viacom allow Cablevision to hold the core networks and ancillary merchandise on phrases pending negotiation of a brand new, lawful settlement Treble damages and authorized charges. Viacom’s eight core networks:
MTV MTV2 Nickelodeon VH1 Spike TV Land Comedy Central BET
Viacom’s 14 ancillary networks:
Centric CMT MTV Hits MTV Tr3s Nick Jr. Nicktoons Palladia Teen Nick VH1 Basic VH1 Soul Emblem* CMT Pure Nation** Nick 2** MTV Jams**
*Optimum East Solely **Optimum West Solely
Antitrust Authorized Background
Federal antitrust legal guidelines shield competitors. By defending competitors, antitrust legal guidelines safe decrease costs, larger high quality, and different advantages for shoppers. The antitrust legal guidelines prohibit tying, the place a strong agency wields its leverage from a product in a single market, referred to as the “tying” product, to compel a buyer to take one other product, referred to as the “tied” product, when that buyer would have most popular as an alternative to take a product that competes with the “tied” product. The rationale antitrust regulation prohibits such tie-ins is to guard competitors and shoppers. If highly effective companies can leverage their energy from one market to a different, they will insulate the tied product from competitors. Forcing clients corresponding to Cablevision to take Viacom networks as an alternative of competing networks, in flip, hurts shoppers as a result of they get much less for what they pay for video providers. Cablevision officers indicated that there can be no speedy disruption in programming choices pending the decision of this matter.
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