(By Balachander) Cablevision Systems Corp. (NYSE: CVC) has filed an antitrust lawsuit against Viacom Inc. (NASDAQ: VIA) for illegally forcing purchase of programming services.
Cablevision alleged that Viacom illegally forced the company to carry and pay for 14 far less popular ancillary channels its customers do not want, such as Palladia, MTV Hits and VH1 Classic, to carry must-have networks such as Nickelodeon, Comedy Central and MTV.
Viacom coerced Cablevision by threatening to impose massive financial penalties unless Cablevision complied with Viacom's demands, the company said.
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"Viacom effectively forces Cablevision's customers to pay for and receive little-watched channels in order to get the channels they actually want," Cablevision said.
In addition, the lawsuit also asserts that Viacom has engaged in unlawful "block booking," which is a form of tying that conditions the sale of a package of rights on the purchaser's taking of other rights.
Cablevision is seeking a permanent injunction barring Viacom from conditioning carriage of any or all of its core networks on its licensing any or all of Viacom's ancillary networks.
CVC shares traded 0.40 percent higher at $15.08 on Tuesday. VIA shares shed 0.22 percent to trade at $59.97.