April 10, 2009 | The Biz

Another tube lawsuit

Kevin Cammarata is suing online video sharing site RedTube for $40 million, but his lawsuit has nothing to do with copyright infringement.

Cammarata is the founder of several adult websites and programs, and is accusing RedTube of providing free porn simply to drive competition out of business. The practice, known as "loss leaders," involves a company deliberately providing an item for so little they are certain to lose money on said item, which is justified as a cost of promotion.

However, Cammarata's lawyers are arguing this violates antitrust laws. Their aim: to shut RedTube down.

“Now that consumers have the ability to watch high-quality adult videos for free on RedTube fewer are making the choice to pay other adult website proprietors for the same or similar content,” the suit said.

Cammarata’s attorney, Jay Spillane, explained that  “tube sites have done injury to the business. ... We feel RedTube and other sites like them are crowding out competition when it comes to the online adult business.

“We worked on several legal theories,” he said, “but the one that seemed most reasonable was unfair competition. We worked on the possibility of copyright infringement but there are technical problems with that.”

A lot of the free video sites will be watching this fight very closely.

TeenRevenue Founder Slaps RedTube With $40M Suit [XBiz]