Viacom Inc, Cablevision settle long-running antitrust lawsuit
17 Oct 2015
Viacom Inc and New York cable giant Cablevision Systems Corp have settled a long-running antitrust lawsuit that highlights programmers' demands that all their channels be included in pay-TV packages.
The two companies yesterday announced that they had settled the matter and were entering into "mutually beneficial business arrangements."
Details of the settlement as also any changes to the companies' carriage agreements were not spelt out.
''We are pleased to have put these matters behind us in ways that benefit both of our companies and look forward to working together to benefit Cablevision's customers," Viacom and Cablevision said in a joint statement.
The suit was filed in US District Court in New York in early 2013, a few months following Cablevision and Viacom agreeing to a new distribution agreement for the Viacom channels.
According to Cablevision's suit Viacom had forced Cablevision to carry over a dozen weak channels in order to carry Viacom's main channels - Nickelodeon, MTV, VH1 and Comedy Central.
Programmers including Viacom, Walt Disney Co and NBC Universal priced their packages in ways that encouraged distributors to carry all their channels.
However, cable companies had issues with the way major programmers bundled their channels, arguing that it was often more expensive to carry a few main channels than to carry the entire bundle.
According to Cablevision, Viacom engaged in a "per se" illegal tying arrangement by bundling "must-have networks" like MTV, Nickelodeon and Comedy Central Palladia, MTV Hits and VH1 Classic, that were lesser viewed.
Viacom threatened a "10-figure penalty" if the bigger networks were licensed but not the smaller ones, according to the complaint.
Cablevision alleged that it could not deploy its resources on other independently-operated networks.
A New York federal judge in June 2014 rejected Viacom's motion for the lawsuit's dismissal pointing out that Cablevision had "pleaded facts sufficient to support plausibly an inference of anti-competitive effects."
Viacom argued that Cablevision had not been ale to demonstrate marketplace foreclosure and that the "discount" that Cablevision got on the bigger networks by accepting the smaller ones a normal TV industry practice.
In counterclaims Viacom called for cancellation of Cablevision contract opening up the prospect of Cablevision could losing to MTV, Nickelodeon and Comedy Central.
The parties, however, had reached an undisclosed agreement.
