The antitrust lawsuit Cablevision Systems Corp. filed on Tuesday may appear only to be against Viacom Inc., but in reality the company is taking on the entire television industry. Viacom’s practices, which Cablevision alleges violate antitrust law, are standard operating procedure for many media companies.
In its lawsuit, Cablevision is railing against the bundling of cable networks—when media companies pair popular networks with less successful channels to give the less-popular programming a boost. In this case, in order for Cablevision to have “must-have networks such as Nickelodeon, MTV and Comedy Central,” Viacom forced it to take 14 “lesser-watched ancillary networks.” Viacom claims that the practice is akin to volume discounts and that it offers customers a lower rate on the whole package, but Cablevision argues that it is anti-consumer and illegal.
Bloomberg reports that Cablevision may have to show that Viacom is a monopoly using its power to force payment for less popular channels, and notes that bundling withstood another antitrust case in 2009, when consumers claimed they were harmed by the practice. In that case, Cablevision and Viacom were on the same side.
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