Antitrust Law Daily Wrap Up, ANTITRUST—D.D.C.: Consent decree resolving concerns over Comcast/NBC joint venture modified, (Aug 22, 2013)

By Jeffrey May, J.D.

The federal district court in Washington, D.C. has approved the modification of a 2011 final judgment that resolved federal and state antitrust concerns over a joint venture involving Comcast Corporation, General Electric Company (GE), and GE's subsidiary NBC Universal Inc. The modification, unopposed by the Justice Department, removed GE as a party (U.S. v. Comcast Corp., August 21, 2013, Leon, R.).

The U.S. Department of Justice and the States of California, Florida, Missouri, Texas, and Washington in January 2011 challenged the joint venture and related transactions, purportedly worth $30 billion, between Comcast—the nation’s largest cable operator and Internet service provider—and GE, giving Comcast control of NBC Universal's cable networks, filmed entertainment, and television programming, including the NBC broadcast network. The joint venture was to be managed and 51 percent owned by Comcast, with GE holding 49 percent ownership.

The consent decree resolved allegations that the transaction, as originally proposed, would lessen competition substantially in the market for video programming distribution by allowing Comcast to disadvantage its traditional competitors—direct broadcast satellite and telephone companies that provide video services—as well as emerging online video distributors (OVDs), such as Netflix.

In February 2013, Comcast announced that it would “accelerate the purchase of NBC Universal” and acquire GE's 49 percent stake in the joint venture for approximately $16.7 billion. That transaction closed in March 2013. This change of circumstances justified the modification, according to the movants. Thus, the court, at the request of the parties, removed references to GE from the final judgment and relieved Comcast and NBC Universal from having to collect documents sent to or received from GE going forward.

Under the consent decree, the joint venture was required to offer an OVD broadcast, cable, and film content that was similar to, or better than, the content the distributor received from any of the joint venture's programming peers. These peers included NBC's broadcast competitors (ABC, CBS, and FOX), the largest cable programmers (News Corp., Time Warner Inc., Viacom Inc., and The Walt Disney Co.), and the largest video production studios (News Corp., Sony Corporation of America, Time Warner Inc., Viacom Inc., and The Walt Disney Co.). Comcast also was prohibited from retaliating against any broadcast network (or affiliate), cable programmer, production studio, or content licensee for licensing content to a competing cable, satellite, or telephone company, or OVD, or for raising concerns to the Justice Department or the Federal Communications Commission. In addition, Comcast was prohibited from unreasonably discriminating in the transmission of an OVD’s lawful network traffic to a Comcast broadband customer.

This is Case 1:11-cv-00106-RJL.

Attorneys: Arthur J. Burke (Davis, Polk & Wardwell LLP) for Comcast Corp. and NBC Universal, Inc. Deborah L. Feinstein (Arnold & Porter LLP) for General Electric Co.

Companies: Comcast Corp.; General Electric Co.; NBC Universal, Inc.

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