Cable/Satellite TV Bundling Consumers often are frustrated because their cable and satellite television services ordinarily come in packages of channels rather than in an “a la carte” menu where the subscriber can choose and pay for only the subscriber’s preferred individual channels. In a recent California case, a group of consumers sued several television networks and cable and satellite distributors, including NBC, Fox, and Time Warner Cable claiming, among other things, that the defendants engaged in Sherman Act violations. The defendant television networks sold television programming to the defendant cable distribution companies in bundles rather than on a per channel basis. The distributors, in turn, sold to consumers in those prepackaged bundles or on a “tier” basis. The plaintiff consumers claimed the practice of offering subscriptions only in bundles was unlawful under the Sherman Act. Questions 1. Explain the nature of the alleged Sherman Act violation. 2. Who won the case? Explain.
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