2:48pm PT by Eriq Gardner
Comcast Hit With Antitrust Lawsuit Over Ad Sales
As the Justice Department probes Comcast's practices in the spot advertising market, the media giant is now facing an antitrust lawsuit that alleges monopolization of ad markets and the exclusionary treatment of one independent cable representation firm.
On Monday, Viamedia filed suit in Illinois with claims that Comcast has gained control of "interconnects" — local cooperatives serving pay-TV providers like ESPN, Discovery and MTV — and won't let Viamedia and its clients have access in large markets like Detroit and Chicago.
Viamedia says the spot cable advertising market is worth some $5.4 billion, and that Comcast is driving independent firms out of business with the interest of ensuring the success of its own ad-sales representation firm, Comcast Spotlight.
"Comcast has employed other tactics along with its abuse of its power over Interconnects in furtherance of its anticompetitive agenda," states the complaint. "For example, Comcast has used acquisitions to gain control of NCC, the lone national clearinghouse for Spot Cable Advertising sales. On information and belief, Comcast is in the process of leveraging its control over NCC to anticompetitively change the way that NCC operates and to embark on a strategy to exclude or threaten to exclude clients of Comcast Spotlight’s competitors from NCC, much as Comcast has done with Interconnects."
The lawsuit claims damages "of tens of millions of dollars, and not less than $75 million." Here's the complaint that also claims as an additional harm, Comcast's practices mean higher prices and other onerous terms on MVPDs,
Viamedia, represented by Mayer Brown, seeks trebled damages, punitive damages and the enjoining of Comcast from anticompetitive conduct.
The lawsuit follows a DOJ probe announced last November.
"The American advertising market is robustly competitive, and advertisers have never had more choices to reach consumers," Comcast said in a statement in reaction to the lawsuit. "Local cable advertising competes with local broadcast TV, radio, newspapers, outdoor display and the rapidly growing digital marketplace. All multichannel-video providers — or MVPDs — account for only about 7% of local advertising sales. In the top 50 DMAs, nearly half of the interconnects, including those in the country’s two largest markets, New York and Los Angeles, for local cable advertising are not run by Comcast. We are currently reviewing the suit and generally do not comment on pending litigation."