Jury Returns $6.3 Million Verdict Against Cox in Antitrust Case

Cox Communications has been hit with a jury verdict of $6.31 million in a case that examined whether the company forced its premium cable-TV customers to rent its set-top boxes.

Under the antitrust laws, the jury’s verdict following three days of deliberations could be trebled to nearly $19 million excluding costs and attorney’s fees, according to law firms that represented the class of consumers.

“With this verdict the people of Oklahoma have scored a victory for fair competition which leads to lower prices and more innovation, which benefits everyone,” said Todd Schneider, a class-action lawyer in San Francisco who represented the plaintiffs, in a statement.

Todd Smith, a Cox spokesman, said the company has moved to overturn the Oklahoma City jury’s verdict.

“Cox is disappointed in the verdict, but gratified that the jury recognized most of the damages plaintiffs were seeking were unwarranted,” he said in an email to Channel Partners.

Smith declined further comment, noting that the court has not yet entered a judgment.

According to the class-action complaint, Cox has reaped a windfall by forcing customers who subscribe to its premium cable services to rent its set-top boxes. About two-thirds of the company’s video customers in Oklahoma City subscribe to premium cable, the complaint said.

Set-top boxes obtained from a source other than Cox won’t work on Cox’s cable system because the company has instructed it system not to acknowledge the third-party equipment or Cox has refused to download software onto set-top boxes that it doesn’t distribute, the lawsuit alleged.

The monthly rental fee that Cox charges for the set-top box quickly exceeds the price paid by the company to buy the equipment, the lawsuit complained.

Alleged the 2012 complaint: “Even if Cox purchases set-top boxes for only $200, Cox’s monthly rental fee of at least $6.99 in its Oklahoma City market will surpass $200 in less than two years and five months, leaving Cox with a minimum of two-and-a-half years of pure profits and consumers with a substantial loss.”

The case is In re: Cox Enterprises Inc. Set-Top Cable Television Box Antitrust Litigation, case number 5:12-ml-02048, in the U.S. District Court for the Western District of Oklahoma.

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