Viacom Sues Time for $2.4 Billion Over Its Pay-TV Practices

Viacom Inc. today charged Time Inc. and its Home Box Office and other cable television subsidiaries with monopolizing the pay-TV airwaves and filed a lawsuit seeking as much as $2.4 billion in damages.

The antitrust lawsuit was filed in U.S. District Court in Manhattan by Viacom International Inc. and Showtime Networks Inc., two units of the New York-based entertainment and communications company.

Viacom said in a statement that the suit against Time, one of the world’s largest entertainment and publishing conglomerates, had been more than a year in preparation.

In the suit, Viacom alleges that Time and its Home Box Office Inc., American Television and Communications Corp. and Manhattan Cable Television Inc. units are violating federal antitrust laws.

‘Predatory . . . Acts’

Viacom charged that Time and its TV holdings are monopolizing, conspiring to monopolize and attempting to restrain trade, practices prohibited by the Sherman and Clayton acts.

Time, HBO, ATC and MCTV are breaking the laws by “engaging in an integrated series of predatory and exclusionary acts and strategies designed to increase the costs of their rivals, raise barriers to entry and expansion and otherwise entrench themselves as monopolists by anti-competitive conduct, injuring the competitive process and, ultimately, consumers,” the suit said.

Viacom alleged that Time and its cable subsidiaries have tied up the limited number of cable outlets available in many markets and also tied up the most desirable films for pay-television programming services.

Time’s American Television & Communications Corp. subsidiary owns or manages cable systems reaching at least 7.2 million viewers in the United States. In each of its local markets, including much of Manhattan and such cities as Memphis and Denver, ATT possesses a nearly 100% market share, the suit said.

Even in markets where Showtime and The Movie Channel are offered through a Time-controlled cable system, Viacom alleges that its channels are treated in a discriminatory manner with regard to channel position and in promotion and marketing.

The suit contends that the violations entitle Viacom to recover three times the actual amount of monetary damage done to Viacom, which was placed at no less than $800 million. After trebling, the amount sought in damages is $2.4 billion.

Viacom also asked the court to permanently bar Time and its pay-TV units from further anti-competitive behavior.

Time Inc. called Viacom’s complaint “totally baseless” and “a rehashing of issues that have been periodically raised for more than a decade.”

“On several occasions, the Justice Department has reviewed many if not all of these allegations and repeatedly concluded that no action was warranted,” it said.