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Tuesday, December 10, 2019

Judge pulls plug on Viamedia antitrust suit vs Comcast over cable TV spot ads

Lawsuits

By Jonathan Bilyk | Aug 18, 2018

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Saying she saw the legal action as little more than an attempt by a competitor to “force” Comcast to do business with them, a Chicago federal judge has pulled the plug on an antitrust legal fight over whether Comcast had used its position to improperly squelch competition in the market for local spot cable TV advertising.

On Aug. 16, Amy J. St. Eve, who now serves as a circuit judge on the U.S. Seventh Circuit Court of Appeals, delivered a win to Comcast in its dispute with rival Viamedia, granting summary judgment to the multimedia giant.

“Undisputed facts demonstrate that Comcast’s refusal to deal with Viamedia - not coercive conduct directed at their mutual customers - is what caused Viamedia’s injuries and damages,” Judge St. Eve wrote in her decision.

According to the decision, Judge St. Eve presided over the case by special designation. She had handled the case as a U.S. District Judge, before she was appointed by President Donald Trump to the Seventh Circuit earlier this year.

The lawsuit had landed in federal court in Chicago initially in May 2016, when Viamedia, a New York-based seller of local cable television advertising had filed its complaint against Comcast, alleging the cable TV and Internet provider had violated federal antitrust law when it blocked Viamedia from selling ads on cable TV networks in the Comcast-dominated Chicago and Detroit cable TV markets.

Viamedia said it was seeking a judgment potentially worth hundreds of millions of dollars.

The complaint centered on Comcast’s control of those two markets, and specifically its control of so-called “interconnects” – cooperative platforms maintained by cable TV service providers, or “multichannel video program distributors” (MVPDs), to allow local advertisers to buy ad time across particular media markets.

Through the years, Comcast has acquired many competitors and their interconnects, granting them effective control of the interconnects, according to Viamedia. From there, Viamedia alleged Comcast moved to squeeze out competitors, like Viamedia, from selling local spot ads in certain markets.

Viamedia asserted this kind of activity amounted to illegal anticompetitive activity, specifically tying - conditioning the sale of one product on the sale of an unrelated product or services - and exclusive dealing.

Judge St. Eve disagreed, however, saying it merely represented Comcast refusing to do business with a rival.

She noted Comcast still allowed as many as 14 percent of its clients to access its interconnects without also purchasing a “bundle,” that included “ad rep” services through Comcast.

While Viamedia alleged Comcast had forced at least two of Viamedia’s former clients, Wide Open West (WOW) and RCN, to so bundle, St. Eve said the record reflects WOW and RCN chose to bundle, because the companies desired “full turnkey” operations with Comcast.

“Viamedia has no antitrust right to force Comcast to help it sell such a bundle to their mutual customers,” the judge said.

Likewise, the judge rejected Viamedia’s assertions Comcast had engaged in improper “exclusive dealing,” saying Viamedia’s complaint appears to demand Comcast reject its customers’ wishes, “to assist competitors.”

“That is not a complaint about exclusive dealing, but about Comcast’s refusal to deal with Viamedia,” Judge St. Eve wrote.

In making those findings, the judge rejected Viamedia’s request for an injunction against Comcast, and granted judgment to the cable company.

“Viamedia brought this case in an attempt to force - under Court order - Comcast to provide it access to the interconnects on favorable terms,” St. Eve wrote.  “Antitrust law does not oblige.”

A spokesman for Viamedia declined to immediately comment on the decision, and whether Viamedia intends to appeal.

Comcast is represented in the action by attorneys with the firms of Jenner & Block, of Chicago, and Davis, Polk & Wardwell, of New York.

Viamedia is represented by the firm of Mayer Brown, of Chicago.

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Organizations in this Story

ViamediaJenner & Block LLPDavis Polk & WardwellU.S. District Court for the Northern District of IllinoisComcastMayer Brown

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