12:46pm PT by Eriq Gardner
Viacom, Cablevision Settle Antitrust Lawsuit Over Channel Bundling
Viacom and Cablevision have come to a resolution to end a closely watched antitrust battle concerning the tying of channels in carriage negotiations.
Cablevision sued Viacom in Feb. 2013, just three months after the programmer and distributor reached its last carriage deal. The cable company alleged that Viacom engaged in a "per se" illegal tying arrangement by bundling "must-have networks" like MTV, Nickelodeon and Comedy Central with lesser-viewed ones such as Palladia, MTV Hits and VH1 Classic. According to the complaint, Viacom threatened a "10-figure penalty" if the bigger networks were licensed but not the smaller ones. The harm alleged was that Cablevision couldn't use its resources on other independently operated networks.
In June 2014, a New York federal judge rejected Viacom's motion to dismiss the lawsuit with word that Cablevision has "pleaded facts sufficient to support plausibly an inference of anticompetitive effects."
Viacom defended itself by arguing that Cablevision had failed to demonstrate marketplace foreclosure and that the "discount" that Cablevision got on the bigger networks by accepting the smaller ones was commonplace in the TV industry. The programmer also brought counterclaims and demanded that its contract with Cablevision be rescinded, opening the prospect that Cablevision could lose rights to MTV, Nickelodeon and Comedy Central.
Instead, the parties have reached an undisclosed agreement.
According to a statement by both parties, "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."
Cablevision was recently sold to European-based Altice for $17.7 billion, though the deal requires the consent of regulators.