Gemstar Confirms Antitrust Inquiry


Gemstar-TV Guide International Inc. confirmed Monday it has been contacted by antitrust investigators at the U.S. Department of Justice, but said it has not been accused by the government "of any wrongdoing whatsoever."

The company issued an unusual news release denying allegations in a story distributed Friday by Reuters news service. The story said the Justice Department was investigating whether Pasadena-based Gemstar violated antitrust laws in its approach to interactive programming guides, a market that it dominates.

Gemstar officials declined to comment last week, but in their news release Monday they said the Reuters story was a "substantial mischaracterization of the situation."

Federal antitrust investigators earlier this year asked Gemstar for information related to undisclosed activities between Gemstar and TV Guide before the two companies closed their $14-billion merger last July, Gemstar said in the release. The investigators also focused on an undisclosed transaction between the merged companies and an unidentified "non-cable entity," the company said.

Gemstar "receives such requests for information from the government from time to time, and has determined that the current request for information is not material to its business," the company said.

A Gemstar spokeswoman did not return calls for comment.

Also Monday, Gemstar announced it had signed a 20-year licensing agreement with Adelphia Communications Corp., a leading cable TV operator. Under the agreement, Adelphia has committed to using Gemstar's interactive program guide software on more than 85% of its systems.

Adelphia is one of four cable companies that had joined forces with WorldGate Communications Inc., an interactive-TV software company, to develop an interactive program guide that could compete with Gemstar's. Three of the four have now signed long-term licensing agreements with Gemstar.

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