The U.S. District Court for the Southern District of New York has denied Viacom's petition to dismiss Cablevision's antitrust suit against the programmer.
Cablevision sued Viacom in February 2013 for requiring it to pay for 14 networks Cablevision said its customers did not want -- including Palladia, MTV Hits and VH1 Classic -- in order for it to have access to "must-have" “core” nets like MTV and Comedy Central.
Cablevision says that is block booking and a per se violation of antitrust laws.
"To survive a motion to dismiss," said the court," "a complaint must plead 'enough facts to state a claim to relief that is plausible on its face.," the court concluded.
Cablevision has met that standard, and that the block booking claim is properly subject of a market power analysis--Viacom argued that the block booking doctrine had been abrogated, but the court was not buying it.
“We are gratified the Court has ruled that Cablevision has stated a valid antitrust claim against Viacom for illegal channel tying," Cablevision said in a statement. "We continue to believe that Viacom’s tying of its popular networks to carriage of its lesser-watched ancillary networks is illegal, anti-consumer, and wrong. We look forward to further pressing our case at the next stage of the proceeding.”
"Cablevision has..pleaded facts sufficient to support plausibly an inference of anticompetitive effects," the court said. "For example, Cablevision alleges that if it were not forced to carry the Suite Networks, it 'would carry other networks on the numerous channel slots that Viacom’s Suite Networks currently occupy.' Cablevision also alleges that Cablevision would buy other “general programming networks” from Viacom’s competitors absent the tying arrangement. Viacom’s motion is therefore denied to the extent it seeks dismissal of Cablevision’s per se tying claim for failure to allege anticompetitive effects."
That means the court agrees that those are at least potentially anticompetitive effects.
Cablevision also asked for an injunction to prevent Viacom from conditioning the licensing of the core networks on licensing the other nets. Viacom said that demand was unfounded and unfair. The court said it was too early in the process to address that Cablevision demand, but did not rule it out down the line.
Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.
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