Dive Brief:
- The Department of Justice has opened an antitrust investigation on whether Comcast exerts too much control over local cable advertising markets.
- Specifically the inquiry is centered on “interconnect” where a pay TV provider such as Comcast sells cable ads to local businesses on behalf of other pay TV providers in the market.
- Comcast Spotlight is a division of the company that sold $2.4 billion in local advertising last year.
Dive Insight:
Comcast is facing increasing government scrutiny over whether it has too much control over the $5 billion local cable ad market. The telecom giant sells cable ads to local businesses for other pay TV providers in the market, a procedure called “interconnects.”
The Department of Justice investigation began during Comcast’s attempt to buy Time Warner Cable last year and federal regulators received complaints about how it controlled access to local pay TV providers. Viamedia Inc. is a third-party cable ad company sent a complaint about Comcast’s activity to the FCC during the proposed merger.
A Comcast division, Comcast Spotlight, sold $2.4 billion in local advertising last year, and according to the company its pay TV partnerships help keep local ad costs down as well as make the process more efficient.
In a statement, Comcast said, “We plan to cooperate fully with the Department of Justice’s inquiry.”