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Wednesday, April 1, 2020

Appeals panel revives Viamedia's $75M antitrust lawsuit vs Comcast over cable TV ads

Federal Court

By Scott Holland | Feb 25, 2020


A federal appeals panel has cleared the way for Viamedia to resume an antritrust lawsuit in which it accuses Comcast of improperly using its market position to stifle competition for certain cable television advertising.

In May 2016, New York-based Viamedia, which sells local cable television advertising, filed its complaint against Comcast in federal court in Chicago, alleging Comcast blocked it from selling ads on cable TV networks in the Chicago, Detroit and Hartford markets. Viamedia asked the court to order Comcast to pay at least $75 million.

More than two years later, then-U.S. District Judge Amy St. Eve granted summary judgment to Comcast, saying, although Comcast wouldn’t deal with Viamedia, there wasn’t evidence of coercive conduct aimed at mutual customers.

Viamedia appealed St. Eve’s ruling to the U.S. Seventh Circuit Court of Appeals. Though St. Eve was appointed to that court by President Donald Trump in 2018, she did not participate in the current proceedings. 

Seventh Circuit Judge David Hamilton wrote the opinion issued Feb. 24; Judge William Bauer concurred, while Judge Michael Brennan concurred in part and dissented in part.

According to Hamilton, Viamedia argued Comcast “deliberately adopted a strategy it knew

would cost Comcast itself millions of dollars in the short run, but the strategy eventually gave it monopoly power in these local markets for advertising representation services.” He explained the strategy involved Comcast preventing Viamedia’s customers from accessing “interconnects,” an industry term for cooperative platforms maintained by cable TV service providers.

Hamilton further said Viamedia’s evidence alleges Comcast became the sole provider of advertising representation in those markets which allows it to undercut further competition in providing cable to retail customers and selling ad spots to local retailers.

“Because Comcast took control of its rival cable companies’ inventory of local ads, local retailers no longer have a choice of cable companies from whom they buy ad time,” Hamilton wrote.

Viamedia’s allegations that Comcast abruptly terminated long-term profitable agreements in order to shift market power dynamics were sufficient to survive summary judgment, Hamilton concluded, explaining “the factual disputes in this case are numerous, genuine and material” and therefore better resolved at trial.

Brennan opened his written opinion by praising Hamilton’s extensive opinion, agreeing Viamedia plausibly alleged an antritrust violation and saying the refusal to deal claim should advance to a trial. However, he disagreed with remanding the portion of the case dealing with a tying claim.

Hamilton said Viamedia plausibly alleged Comcast would only let distributors access the interconnects if they became its customers for ad rep services as well. Brennan, however, agreed with Judge St. Eve’s findings in granting summary judgment, specifically that “there was no evidence that Comcast conditioned access to the Interconnect on the purchase of ad representation services.”

Brennan further said he believed Viamedia failed to establish a second antitrust injury noticeably distinct from the refusal to deal allegations. While Viamedia was trying to sell to multichannel video program distributors, like Wide Open West and RCN, a bundle of Comcast’s Interconnect and its own ad representation, Comcast wasn’t obligated to help sell that bundle to mutual customers.

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

ViamediaU.S. District Court for the Northern District of IllinoisU.S. Court of Appeals for the Seventh CircuitComcastDavis Polk & Wardwell LlpMayer Brown,LlpJenner & Block