Cablevision’s antitrust attack on Viacom: Who’s “strong-arming” whom?
In the topsy-turvy world of antitrust, what’s coercive is deemed voluntary, and what’s voluntary is deemed coercive. A while back, for example, I pointed out that it’s wrong to call Google’s action “voluntary” when it’s changing business practices in response to threats from the Federal Trade Commission.
Now here’s the opposite error, arising out of an antitrust suit by Cablevision against Viacom. The two companies signed a contract in which Cablevision (a cable provider) purchased a bundle of Viacom programming at a discounted price.
Viacom’s price would have been significantly higher if Cablevision had promised to transmit only Viacom’s most popular channels (MTV, BET, Nickelodeon, etc.) But Viacom offered a lower price based on Cablevision’s promise to carry a dozen or so less popular channels as well. Cablevision agreed to the lower-priced deal.
Now Cablevision has filed a private antitrust complaint full of accusations that Viacom “strong-armed” Cablevision, used “coercive tactics” and “forced” it to carry more programming than it wanted.
Excuse me? Signing a contract that one has a right to reject is the epitome of voluntary action. The truth is that Viacom offered its most attractive products at a price higher than Cablevision was willing to pay. That’s not coercion. Cablevision refused that deal. That’s not coercion, either. Viacom offered a different deal at a lower price. Nobody coerced either Cablevision or Viacom to sign that contract.
Where does coercion actually enter the picture? When Cablevision asks the courts, in its antitrust suit, to force Viacom into changing the deal.