An Illinois U.S. District Court Judge has refused to dismiss most of spot cable ad sales company Viamedia's lawsuit against Comcast and its Comcast Spotlight ad sales arm.
Comcast had moved to dismiss the Viamedia complaint, which alleged that Comcast has unlawfully impeded Viamedia and other spot cable ad sales companies' ability to compete with Spotlight. Specifically, Viamedia says Comcast has abused its controlling stake in NCC and a regional cable interconnect spot sales cooperative to thwart competition and force spot cable advertisers to use Spotlight instead of Viamedia or others.
The complaint is focused on Chicago and Detroit, where Comcast controls regional cable ad sales, says the court.
In the decision upholding Comcast's request in part, Judge Amy St. Eve said Viamedia "has plausibly alleged that Defendants engaged in conduct that lowered the quality of service available in the spot cable advertising representation market, and that this conduct resulted in harm to Viamedia." She said those allegations "sufficiently plead antitrust injury."
As to Viamedia's claim of illegal tying in violation of the Sherman Antitrust Act, St. Eve said that while Comcast can "attempt" to show why their conduct does not violate the Act, "Viamedia’s allegations of a tying arrangement sufficiently state a claim at this stage...Viamedia has plausibly alleged distinct markets for spot cable advertising representation services and Interconnect services," a necessary predicate for an illegal tying claim.
As to Viamedia's claim of exclusive dealing, St. Eve said "at this juncture" Comcast's argument did not persuade the court to dismiss the claim. "[A]lthough an exclusive dealing arrangement may be procompetitive when certain advertising representation firms engage in it," the judge wrote, "the complaint alleges that Defendants’ exclusive dealing and unique position in the spot cable advertising business caused harm to competition." Comcast will have to demonstrate to the court why that was not the case.
Viamedia's claim of "refusal to deal" was the one part of Comcast's request to dismiss that the judge agreed to. She cited Supreme Court precedent that "as a general matter, the Sherman Act ‘does not restrict the long recognized right of [a] trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal...Viamedia has not alleged or explained how Defendants’ refusal to deal with it—separate from Defendants’ other conduct like conditioning MVPDs’ access to Interconnects on accepting Comcast Spotlight’s services even for advertising sales that do not involve an Interconnect—has no rational procompetitive purpose."
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