The Department of Justice and 16 state attorneys general filed briefs agreeing with a judge's decision to temporarily block the launch of a streaming service that would have offered sports content from Disney (ESPN), Fox, and Warner Bros. Discovery.
In August, U.S. District Judge Margaret M. Garnett in New York agreed with Fubo, a streaming service that has filed a lawsuit against the partners of the new platform, Venu Sports, claiming that the service would involve violating federal antitrust laws.
Venu was to have launched this fall, showing professional sports content from the National Football League, National Hockey League, the National Basketball Association, along with other content.
The Sports Fan Coalition, reporting the briefs that have been filed, noted that it, the America Economic Liberties Project, Electronic Frontier Foundation, Open Markets Institute, and Public Knowledge, filed an amicus brief supporting Fubo's lawsuit.
The Venu Sports partners have appealed the injunction, after which the American Antitrust Institute, the Center for Democracy and Technology, and the National Consumers League, also joined with Fubo.
The DOJ's brief, by Assistant Attorney General Jonathan Kanter and others from the AG's office, argues that Garnett's decision should be affirmed, and said that Venu's argument that forcing large bundles on fans isn't anticompetitive is a "red herring."
"This appeal is about a claim that Defendants' creation of Venu — indisputably concerted action — violates Section 7 of the Clayton Act," the brief said. "Section 7's purpose is to 'arrest incipient threats to competition which the Sherman Act did not ordinarily reach.'"
The brief further argues that Fubo will likely succeed in a trial against Venu.
"As the district court found, 'the current live pay TV market is highly competitive,' with numerous distributors offering packages of television channels to consumers," Kanter wrote. "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."
Meanwhile, the 16 state attorneys general focused on what they called the claims made by the Venu partners "erroneous" that they have "no duty to deal" were erroneous.
The rules under "duty to deal" say companies with significant market power could be required to distribute products or services to competitors to maintain market competition while preventing anti-competitive behavior, the SFC noted.
Garnett ruled this "duty to deal" defense was not valid, and the state attorneys general agreed, writing that the "doctrine applies only to certain types of unilateral conduct challenged under Section 2 of the Sherman Act and does not apply to joint conduct like the launch of Defendants' joint venture here."
The attorneys general added that the district court properly rejected the defendants' defense, stating that they would violate Section 7 of the Clayton Act "if it substantially lessens competition in the relevant market."
The state attorneys general joining the brief were: 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; and Brian Schwalb, Washington, DC.