FOLLOW US

Briefing Notes

• Newsmax alleges Fox uses exclusionary contracts to block competitors from cable distribution networks in violation of Sherman Act Sections 1 and 2
• Recent federal ruling inVitamin Energy v. Bhargava dismissed similar antitrust claims against 5-Hour Energy for failing to prove market-wide harm versus mere competitive losses
• Newsmax faces comparable challenges proving actual antitrust injury rather than normal business competition under established legal precedent

Legal Vulnerability Analysis: Why Newsmax May Face Dismissal

After analyzing both the Newsmax complaint and Judge Grey's dismissal order in Vitamin Energy, Inc. v. Manoj Bhargava, Case No. 24-13125 (E.D. Mich. Aug. 29, 2025), striking parallels emerge that suggest Newsmax's antitrust claims face significant legal vulnerabilities.

Both cases center on Sherman Act violations, which require plaintiffs to demonstrate actual antitrust injury - harm to the competitive process itself, not merely harm to individual competitors. As the Sixth Circuit established in NicSand, Inc. v. 3M Co., 507 F.3d 442, 450 (6th Cir. 2007), "one competitor may not use the antitrust laws to sue a rival merely for vigorous or intensified competition."

Problematic Parallels Between the Cases

1. Contractual Arrangements as Normal Business Practice

In Vitamin Energy, Judge Grey found that "a multi-year agreement between a supplier and a retailer amounts to legitimate competition, not an antitrust injury," citing NicSand, 507 F.3d at 453. The court noted that Vitamin Energy itself had entered similar placement agreements with retailers, undermining claims that such contracts were inherently anticompetitive.

Similarly, Newsmax's complaint acknowledges standard industry practices while labeling Fox's identical behavior as anticompetitive. The complaint states that distributors "typically negotiate similar carriage agreements with the programmers, determining which channels to offer and the terms of carriage, including pricing and placement in various 'tiers'" (¶20). This admission could prove fatal, as it suggests Fox's conduct falls within normal industry parameters.

2. Failure to Demonstrate Market-Wide Harm

The Vitamin Energy court emphasized that antitrust violations must "harm the competitive process and thereby harm consumers, as mere harm to one or more competitors will not suffice" (citing United States v. Microsoft Corp., 253 F.3d 34, 58 (D.C. Cir. 2001)).

Newsmax faces the same challenge. While claiming Fox's conduct "impedes competition in the entire Right-leaning Pay TV News Market" (¶3), the complaint primarily documents Newsmax's own business struggles rather than market-wide harm. The complaint acknowledges Newsmax still maintains distribution on various platforms, including recent addition to Hulu+ (¶53), suggesting the market remains accessible to competitors.