The U.S. Chamber of Commerce is backing Comcast in its petition to the Supreme Court to hear its challenge of a Seventh Circuit Court of Appeals decision that could cost the cable operator a half-billion dollars.
The appeals court had overturned a lower court's dismissal of the claim by ad sales company Viamedia that Comcast was engaging in exclusionary conduct and monopolizing the spot cable market.
The chamber has filed an amicus brief with the Supreme Court arguing that Comcast did not unlawfully refuse to deal with Viamedia but, instead, ended Viamedia's access to regional ad sales interconnects so Comcast could sell the ads itself, "eliminating the middleman."
The lower court, in rejecting the Viamedia suit at the pleadings stage--before the facts were argued in court--found that to conclude such action was a refusal to deal, the Viamedia needed to show that a defendant's actions "serve no rational pro-competitive purpose," but the Seventh Circuit reversed.
It held that "[v]alid business justifications are relevant only to the rebuttal of a prima facie case of monopolization,” and that “balancing anticompetitive effects against hypothesized justifications depends on evidence and is not amenable to resolution on the pleadings.”
The Chamber said the Supreme Court needs to weigh in to establish that refusals to deal in the context of cutting out the middleman is "a proven way to reduce costs and benefit consumers."
It adds that "[s]uch refusals to deal are so predominantly procompetitive that four circuits have held that, if a plausible business justification is present, judgment for the defendant follows as a matter of law."
That means there is a difference of opinion between the Seventh Circuit and those other four. Circuit splits are one reason the Supreme Course will hear an appeal since it means a difference in how the law is being applied in different parts of the country.
If the Seventh Circuit decision stands, it argues, the "balancing test" it talks about "would effectively preclude dismissals on the pleadings in refusal-to-deal cases [but only where that court has jurisdiction], subjecting efficient firms to the substantial costs and investment of time required to defend themselves in antitrust suits."
The chamber argues that the Seventh Circuit's conclusion that Viamedia "has jury-ready claims against Comcast for monopolizing in violation of the Sherman Act" was well-reasoned" and said it is ready to make that case in court.
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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.