DOJ and 16 State Attorneys General join SFC in Supporting injunction against Venu Sports
Possibly the most significant antitrust case working its way through the courts right now is Fubo v. Disney et. al. In August, we, along with the America Economic Liberties Project, Electronic Frontier Foundation, Open Markets Institute, and Public Knowledge, filed an amicus brief supporting Fubo in its lawsuit against Disney and the Venu Sports joint venture partners. After Judge Garnett granted Fubo a preliminary injunction against the venture, the Venu Sports partners appealed. We filed another amicus brief, but with even more partners, adding the American Antitrust Institute, the Center for Democracy and Technology, and the National Consumers League.
Well, the team just keeps getting bigger! Now, the DOJ and 16 state Attorneys General have filed briefs.
The DOJ’s Brief
Assistant Attorney General Jonathan Kanter filed his brief also arguing that Judge Garnett’s decision should be affirmed. His brief was broad and addressed questions of market definition, antitrust injury, the importance of new entrants, and the anticompetitive effects of Venu Sports. Specifically, he calls the Defendant’s argument that forcing fat bundles on fans isn’t anticompetitive a “red herring” because,
“This appeal is about a claim that Defendants’ creation of Venu—indisputably concerted action—violates Section 7 of the Clayton Act. Section 7’s purpose is to ‘arrest incipient threats to competition which the Sherman Act did not ordinarily reach.’”
On the contrary, Section 7 of the Clayton Act prohibits precisely the kind of joint venture Venu Sports is trying to become. Section 7 cases are supposed to examine whether a transaction may significantly lessen competition or “tend to create a monopoly.” It is more than evident that Venu Sports would choke out any potential sports streaming competitor and leave them the sole provider to every sports fan’s favorite team.
Because of this, the DOJ argued that the plaintiffs will likely succeed at trial. The possibilities for anticompetitive harm are so great that they believe that Judge Garnett’s injunction should be affirmed.
“As the district court found, ‘the current live pay TV market is highly competitive,’ with numerous distributors offering packages of television channels to consumers, and Venu would lessen that current competition by giving Defendants a path to collective dominance and foreclosing Venu’s rivals. That is paradigmatic Section 7 harm.”
The States’ Brief
The State AGs focused their brief on the Defendant’s “erroneous” claim that they have “no duty to deal.” In antitrust law, The "duty to deal" says that a company with significant market power, particularly a monopolist, may be required to distribute its products or services to competitors under certain circumstances to prevent anti-competitive behavior and maintain market competition. However, courts usually don’t impose such a duty unless there is a clear showing of market harm.
While the Defendants argue they have no duty to deal with Fubo, Judge Garnett ruled this defense doesn’t hold water and the state AGs agreed saying:
“…doctrine applies only to certain types of unilateral conduct challenged under § 2 of the Sherman Act and does not apply to joint conduct like the launch of Defendants’ joint venture here.”
and
“…the district court here properly rejected Defendants’ “no duty to deal” defense. Regardless of whether Defendants’ licensing deals might in the abstract be legal under that defense, Defendants’ joint venture violates § 7 of the Clayton Act if it substantially lessens competition in the relevant market. “
The State Attorneys General who joined the brief are:
Letitia James, New York
Rob Bonta, California
Philip Weiser, Colorado
William Tong, Connecticut
Kathleen Jennings, Delaware
Kwame Raoul, Illinois
Aaron Frey, Maine
Anthony Brown, Maryland
Andrea Campbell, Massachusetts
Keith Ellison, Minnesota
Matthew Platkin, New Jersey
Ellen Rosenblum, Oregon
Michelle Henry, Pennsylvania
Peter Neronha, Rhode Island
Charity Clark, Vermont
Robert Ferguson, Washington
Brian Schwalb, Washington, DC
All the arguments on Fubo’s side are pretty convincing. As much as fans may want a product like Venu Sports, they don’t want to be forced to subscribe to a monopoly. The best way to service fans with a competitive marketplace. We hope the 2nd Circuit will affirm Judge Garnett’s ruling.
