Cox Communications cable subscribers have recently won a major antitrust lawsuit of $6.31 million. Additionally, more damages could be awarded in the wake of future antitrust lawsuits.
The cable subscribers argued successfully in a federal court in Oklahoma that Cox unlawfully required customers to rent expensive cable boxes in order to receive premium cable services. A consolidated lawsuit was ruled in their favor.
Additional lawsuits in other regions of the country are still waiting to be heard.
The court explored the question of whether or not subscribers of Cox were being unfairly required to rent the cable boxes. Although some other companies have offered alternative boxes, the market is very thin. In most cases, customers who want premium cable must spend extra money on the company’s cable boxes.
However, Cox argued that it informed customers that they could use whatever retail box, and the services were not necessarily tied to the purchase of their cable box. They said the fact that their customers were unable to obtain alternative cable boxes for whatever reason was not their fault.
The plaintiffs responded by saying that Cox unfairly attacked its cable box competitors, by saying that the alternative cable boxes were inferior, and they exaggerated their disadvantages to traditional Cox cable boxes. Additionally, they also said that Cox constructed barriers to entry for alternative cable box companies, making it very difficult to maintain a secondary market.
The plaintiffs wrote in court papers, “From this evidence, a jury could reasonably infer that Cox contributed to the lack of a viable market for third-party set-top boxes and that several well-financed consumer electronics companies were poised to enter this market. Thus, the alleged lack of competitors does not excuse Cox’s coercion.”
Furthermore, many customers were also unable to switch to an alternative cable provider, since Cox controls almost 75% of the cable services market in the state of Oklahoma. They said that the company was dominating the market to the detriment of customers.
Ultimately, the court ruled in favor of the cable subscribers. Cox plans to appeal the decision.
The company will still face legal action in other regions of the country.
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