March 2012 was a big month for Microsoft’s video game platform, Xbox 360. Microsoft executive Yusuf Mehdi told the L.A. Times that the average amount of time Xbox 360 users spend on Microsoft’s online service, Xbox Live, is now 84 hours a month up 30% from last year. In March, many new apps debuted on the Xbox, including ones from Major League Baseball and the premium cable channel HBO, to further Microsoft’s goal of making the Xbox the centerpiece for home entertainment.
Also debuting is an app from Comcast that allows customers the ability to stream video. This is similar to an app Verizon and other media companies rolled out last year. Potential problems for Comcast persist, as Comcast normally restricts the amount of data their customers can download in a month. As Ars Technica points out, streaming video can eat up that data limit pretty quickly, so Comcast will not set data limits for people who use their Xbox app to watch the videos. Tech Dirt questions if this is a violation of FCC rules, but there might be an additional legal problem with this practice: Tying.
For those of you unfamiliar with Antitrust law, the U.S. Department of Justice and the Federal Trade Commission define tying as:
A contractual or technological requirement, a seller conditions the sale or lease of one product or service on the customer’s agreement to take a second product or service.
While tying is technically a “per se violation” (automatically illegal), recent courts rarely find tying products to be illegal. Here, there are a couple of issues. Would be whether Comcast’s app for Xbox basically forces someone to buy an Xbox if they want to stream videos and not have it count against their Comcast data limit. Are there some content that is exclusive only to Comcast that would force Xbox Live users to switch cable providers to Comcast to get it? We can go on with this because tying is a very popular antitrust claim, but unfortunately it will probably not go anywhere at the time being. All the new Xbox apps would probably cut against the tying argument because there are so many video options that probably will play some of the same content the Comcast app can play. The data caps might be an issue, but that the FCC will probably handle it through their open internet policy, rather than having it go to the Justice department via an antitrust claim.
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