Newsmax Sues Fox News for Allegedly Abusing Monopoly Power

Newsmax filed a lawsuit Wednesday accusing conservative media giant Fox News of acting as a monopoly and suppressing its right-leaning competitors.

“Fox has sought to protect and expand its monopoly power in the Right-leaning Pay TV News Market by engaging in a suite of anticompetitive behaviors,” attorneys for the outlet wrote in the suit in federal court in southern Florida.

The lawyers allege that Fox News coerces distributors into “exclusionary and restrictive agreements,” and that it has used “intimidation tactics” to hurt Newsmax — including hiring “private detective firms to investigate Newsmax executives.”

“But for Fox’s anticompetitive behavior, Newsmax would have achieved greater pay TV distribution, seen its audience and ratings grow sooner, gained earlier ‘critical mass’ for major advertisers and become, overall, a more valuable media property,” they wrote in the suit.

Newsmax wants a judge to issue a permanent injunction barring Fox’s allegedly exclusionary agreements.

It also seeks a judgment for three times the amount of damages that it has allegedly sustained by Fox, as well as pre- and post-judgment interest “at the highest legal rate.”

Ruddy told CNBC that Newsmax believes the total damages figure will be “significant and serious.”

The suit alleges that Fox, which has long been the most-watched cable news network on television, uses multiple strategies to “coerce distributors into not carrying or into marginalizing other right-leaning news channels.”

Fox either explicitly or tacitly makes access to its content conditional on distributors agreeing not to carry those channels, the suit alleges.

If they do, Fox imposes financial penalties on those distributors, by requiring them “to carry and pay high fees for Fox’s little-watched channels like Fox Business,” according to Newsmax.

Fox also allegedly “inserts a suite of other contractual barriers into its carriage agreements intended to prevent Newsmax and others from competing.”

“These tactics constitute unlawful restraints of trade and flow directly from Fox’s unlawful monopolization of the Right-leaning Pay TV News Market,” the suit alleges.

“Fox’s longstanding and ongoing practices have harmed and will further harm, competition and consumers in the United States.”