It’s a right-wing media brawl: Newsmax fired a federal antitrust lawsuit accusing Fox News and Parent Fox Corp. of engaging in a “broad and illegal campaign” for years, blocking competition in the paid TV news market at the bottom right.
“For a long time, Fox Corporation has been engaged in exclusive schemes to increase and maintain the market advantage of US right-leaning pay TV news, which will curb competition that harms consumers, competition, Newsmax Broadcasting and LLC,” the company said it filed Wednesday.
The Newsmax lawsuit argues that Fox News (“required news channels”” controls “give content distributors key market power and exploitation to impose troublesome demands.” Fox will leverage the power of this market to ensure that other right-lease news channels, including Newsmax, do not alienate them.
In a statement to Variety, a spokesperson for Fox News Media said:
The Newsmax lawsuit seeks unspecified monetary damages and a permanent injunction “prohibiting Fox’s exclusive agreement and prohibiting other ongoing and future exclusive acts.” The suit seeks damages under sections 1 and 2 of the Sherman Act, the Florida Antimonopoly Act, and the Florida Deceptive & Unfair Trade Practices Act. According to Newsmax, under federal law, the damages awarded in this case would triple to “if Newsmax becomes popular, Fox faces serious financial liability.”
“Fox may have benefited from exclusive contracts and threatening tactics for years, but that’s over,” Newsmax CEO Christopher Rudy said in a statement. “The lawsuit is to restore fairness to the market and ensure that Americans make real choices in the news they are watching. If we win, Fox’s damage could triple under federal law.
A copy of the Newsmax complaint is available at this link. The lawsuit was filed in US District Court for the Southern District of Florida.
Newsmax claims Fox News has “extracted competitive freight charges” for its dominant position, charging pay TV distributors about $2.20 per person per month, Double CNN fees and six times more than MSNBC.
Newsmax cites internal communications between Fox News officials after the 2020 election, which was published through an honor-impaired lawsuit filed by the Dominion voting system, which repeatedly aired false claims and influence on the 2020 US presidential election. (Fox News agreed to pay $787.5 million to resolve Dominion Suit in April 2023, but Newsmax resolved a similar lawsuit filed by Dominion for $67 million last month.)
In the text and email highlights of The Newsmax, The Suite highlights: Fox News top host Tucker Carlson warned producers that “alternatives like Newsmax could be devastating for us.” Jay Wallace, president of Fox News, wrote in text to CEO Suzanne Scott that Fox is on “a footing of war” at Newsmax. Fox Corp. Chairman Rupert Murdoch told Scott that Newsmax “should watch it” as a result of the Wall Street Journal story about the network.
Newsmax claims Fox News uses “at least three” anti-competitive tactics.
Fox News imposes explicit or implicit clauses regarding distributors, and conditioning distributors access to “commercially important content” to concessions of distributors that do not carry other right-leaning news channels, such as Newsmax, according to Newsmax. According to Newsmax Fox, the “additional charge” includes a “drugdown clause” that “penalizes distributors to place Newsmax in its base package” by requiring simultaneous promotion of Fox’s less popular channels.”
Additionally, Fox News has been allegedly “putting guests pressured them not to appear in Newsmax,” and “running an online smear campaign and hiring private investigators targeted at NewsMax to undermine the company’s credibility,” according to NewsMax.
The final result is that Fox News intentionally blocked Newsmax’s growth in terms of distribution on platforms such as Disney’s Hulu, Dish Network’s Sling TV, Fubo, and “other major platforms.”
“However, due to Fox’s anti-competitive behaviour, Newsmax achieved a larger wage television distribution, growing faster viewers and ratings, gaining a “critical mass” of key advertisers, and overall became a more valuable media property,” the complaint states. “Fox’s campaign to stunt Newsmax’s business has slowed the growth of Newsmax’s pay-TV distribution, causing major damage to Newsmax, missed the lost form of business, marketing revenue, and missed the total amount, especially in the vital virtual multi-channel video programming distributor (“VMVPD”) arena.
And according to the lawsuit, “Newsmax is far from the sole victim. The defendant’s anti-competitive conduct will hinder competition across the right-leaning salary TV news market, robbing consumers of real choice, and increasing the costs that consumers have to strain to access right-leaning news.”
Newsmax is represented in the lawsuits by law firms Kellogg, Hansen, Todd, Figel & Frederick, and Kenny Nachwalter of Sperling.
