Cable television companies may bundle the popular programs with the dregs, rather than allowing customers to pick and choose individual channels to buy, says a federal appeals court. The decision is a defeat for consumer antitrust claims against the cable firms.
The 9th Circuit Court of Appeals upheld the 2007 dismissal of an antitrust lawsuit in Los Angeles against NCB Universal, Viacom Inc., Walt Disney Co. and Fox Entertainment Group for requiring retail subscribers to cable and satellite TV to buy bundled programming.
The programmers may bundle high demand channels with low viewership, low-demand channels as a way of selling the low viewer materials without running afoul of antitrust law, according to the court.
While the programming agreement may have the effect of reducing consumers’ choices or increasing prices they pay, the lawsuit doesn’t include a claim of injury to competition. Despite the alleged injury to consumers “both effects are fully consistent with a free, competitive market,” write Judge Sandra Ikuta for the panel.
Ikuta found that the lawsuit did not accuse the programmers of an injury to competition, as opposed to an injury to consumers and that’s the rub for antitrust.
There must be an injury to competition to violation the Sherman Antitrust Act.
Case: Brantley v. NBC Universal, Inc. No. 09-56785