The US government is launching an investigation into whether Comcast unfairly monopolizes the cable advertising sales market, the Wall Street Journal reports.
According to a civil investigative demand seen by The Wall Street Journal, the US Justice Department is looking at whether Comcast is holding back competition in the “spot” cable ad sales market, which could be violating federal antitrust law.
The spot market represents the short amount of broadcasting time in which cable TV channels allow pay-TV operators — the likes of Comcast — to sell local TV advertising, targeted to specific geographies or networks during the commercial breaks.
Because the audience for spot advertising is smaller, spot ad rates tend to be a lot lower than buying national TV commercials. Spot advertising only makes up a small proportion of the total $71.1 billion US TV ad market.
The Wall Street Journal says the investigation focuses on two areas: “monopolization or attempted monopolization” and whether Comcast’s deals with competitors in the pay-TV market are “an unlawful restraint on trade.”
Business Insider has contacted both Comcast and the Department of Justice for comment. We’ll update this post once we hear back.
In a statement provided to The Wall Street Journal, Comcast said it plans to fully cooperate with the DoJ’s inquiry.
The Wall Street Journal explains what the investigation will cover:
The probe isn’t about the size of Comcast’s footprint for providing cable TV service. The question has more to do with whether Comcast is wielding outsize influence when it comes to selling local TV advertising on cable, in two main ways: Comcast takes the lead on negotiating with advertisers on behalf of rival pay-TV providers in many markets. Comcast also owns a majority stake in one of the main companies that helps national advertisers buy commercial time from cable providers in local markets.
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