Viacom-Cablevision antitrust battle escalates with fraud allegations

The ongoing nasty antitrust court battle between Viacom and Cablevision (NYSE: CVC) has escalated with Viacom now alleging that Cablevision committed fraud when the two companies signed a carriage deal in 2012. Viacom wants that contract with the cable company to be rescinded.

The dispute revolves around a difference of opinion, according to a story in The Hollywood Reporter. In December 2012 the two companies signed an agreement, but two months later Cablevision filed a suit alleging Viacom engaged in a "per se" illegal agreement by bundling more desirable networks with less valuable ones and threatening a "10-figure penalty" if Cablevision didn't carry both.

Viacom, in turn, said Cablevision got a discount on the top networks if it carried the others, and that Cablevision had a "secret plan" all along to balk at the carriage deal.

The matter has gone back and forth in court since then, with U.S. District Court Judge Laura Taylor Swain declining to void the licensing deal until Viacom filed a denial-filled answer to Cablevision's claims--along with a counterclaim of its own. The counterclaim is detailed in court documents that cited "Cablevision's fraudulent conduct--including both express misrepresentations and fraudulent omissions--in inducing Viacom to enter into an elaborately negotiated affiliation agreement."

Cablevision never really intended to follow that agreement, according to the filing, which noted that "at the time Cablevision signed the agreement, Cablevision intended to claim it was invalid, illegal and unenforceable despite Cablevision's contrary express representations to Viacom in the agreement. And, upon information and belief, at the time Cablevision signed the agreement, it planned to challenge the agreement on that basis in order to invite the Court to rewrite it for its benefit."

The dispute comes down to whether or not Cablevision can get a discount on the premium Viacom channels without also carrying the second-tier channels that include Palladia, MTV Hits and VH1 Classic.

Cablevision issued a statement to the Hollywood Reporter that called Viacom's latest claims "baseless" and "a transparent attempt … to delay and distract attention from Cablevision's valid antitrust claim against Viacom for illegal channel tying."

For more:
- the Hollywood Reporter has this story
- see Viacom's filing

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