Newsmax sues Fox News over alleged antitrust violations

Newsmax Inc. (NYSE: NMAX) filed a federal antitrust lawsuit against Fox Corporation and Fox News Network in the U.S. District Court for the Southern District of Florida, according to a company statement.

The lawsuit alleges Fox engaged in anticompetitive practices to block competition in the right-leaning pay television news market. Newsmax seeks damages under the Sherman Act, Florida Antitrust Act, and Florida Deceptive & Unfair Trade Practices Act.

The complaint accuses Fox of using exclusionary tactics including no-carry provisions that condition Fox News access on agreements not to carry competing channels, financial penalties requiring distributors to carry low-demand Fox channels if they carry Newsmax, and confidential provisions that penalize distributors for placing Newsmax in basic packages.

Internal Fox communications cited in the complaint show executives viewed Newsmax as a competitive threat after the 2020 election. Former Fox host Tucker Carlson allegedly warned that "an alternative like Newsmax could be devastating to us," while Fox News President Jay Wallace told CEO Suzanne Scott that Fox was on "war footing" over Newsmax's rise.

The lawsuit claims Fox charges distributors approximately $2.20 per subscriber per month, double CNN's fees and six times MSNBC's rates. Newsmax alleges these practices prevented the company from securing carriage on platforms including Hulu, Sling, and Fubo.

"Fox's behavior represents a textbook abuse of monopoly power," said Michael J. Guzman, lead counsel for Newsmax at Kellogg Hansen. "Competition, not coercion, should decide what news channels Americans can watch."

Newsmax requests the court declare Fox's conduct unlawful, award monetary damages, and enjoin Fox from continuing alleged exclusionary practices. Under federal law, any damages awarded would be trebled.

The case is being handled by Kellogg, Hansen, Todd, Figel & Frederick and Sperling Kenny Nachwalter.

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