By Andrew Feinberg - 03/30/12 07:54 PM EDT
A three-judge panel of the U.S Court of Appeals for the Ninth Circuit has ruled that content owners' requirement that cable and satellite operators sell channels in bundles does not limit competition under the Sherman Anti-Trust Act.
The suit had originally been brought by a group of cable and satellite subscribers who alleged that the practice of multichannel video program distributors (MVPDs) selling "bundles" of channels while not allowing the same channels to be purchased individually was a result of content providers exploiting their market power.
After hearing an appeal by the consumer plaintiffs, a panel consisting of Judges Barry Silverman, Consuelo Callahan and Sandra Ikuta voted unanimously to affirm the district court's dismissal of the complaint. In the opinion written by Judge Ikuta, the court ruled that while content owners might be exploiting their market power by requiring desirable channels to be bundled with less desirable channels and therefore "enhancing the price of the tying product," the practice did not actually threaten an injury to competition.
"Antitrust law recognizes the ability of businesses to choose the manner in which they do business absent any injury to competition," Judge Ikuta wrote.
Maxwell Blecher, a lawyer for the plaintiffs, described the court's decision as factually and legally flawed. "Deprivation of choice is an anticompetitive effect that antitrust laws condemn," he said, adding that the plaintiffs plan to appeal the decision to the U.S. Supreme Court.
Representatives for several cable companies and programmers did not immediately respond to The Hill's request for comment.