Justice Department Settles Antitrust Claim Against DirecTV
March 23 2017 - 8:17PM
Dow Jones News
By Joe Flint
The Justice Department settled its antitrust lawsuit Thursday
against AT&T Inc.'s DirecTV, that alleged the satellite
broadcaster had illegally shared information with rival pay-TV
operators at a time when all were resisting carriage of a sports
channel owned by the Los Angeles Dodgers.
The settlement bars DirecTV and AT&T from illegally sharing
confidential, forward-looking information with competitors. The
Justice Dept. said DirecTV was "the ringleader in a series of
unlawful information exchanges" with its rivals Cox Communications
Inc., Charter Communications Inc. and AT&T, before the
telecommunication giant's purchase of the satellite company.
The distributors were aligned against Spectrum SportsNet LA
because of the high cost for the service. Time Warner Cable, which
has since been acquired by Charter Communications, paid the Dodgers
for the rights to distribute the channel for 25 years in a deal
Major League Baseball and the team valued at $8.35 billion. In
turn, Time Warner Cable sought a premium from other distributors to
carry the channel.
"Today's settlement promotes competition among pay-television
providers and prevents AT&T and DirecTV from engaging in
illegal conduct that thwarts the competitive process," said Brent
Snyder, Acting Assistant Attorney General of the Justice
Department's antitrust division.
What the settlement won't do is put Dodger games on DirecTV or
AT&T's pay-TV service U-Verse or Cox Communications. The
majority of Los Angeles area residents have been unable to watch
the Dodgers on TV since SportsNet LA launched in 2014. Charter now
does carry the service because of its merger with Time Warner Cable
in 2016.
The settlement "is intended to prevent the competitive process
for acquiring video programming from being corrupted by improper
information sharing among rivals and to prevent harm to consumers
when such collusion taints the competitive process and makes
carriage on competitive terms less likely," the Justice Department
said in a submission filed in federal court.
The accord goes beyond just negotiations for SportsNet LA and
applies to negotiations with all program suppliers. It also forces
AT&T and DirecTV to monitor certain communications their
programming executives have with their rivals and to implement
antitrust training and compliance programs, the Justice Department
said.
The settlement removes a potential complication for AT&T's
proposed $48.5 billion deal for Time Warner Inc., the entertainment
giant whose holdings include Warner Bros., CNN and HBO. Time Warner
is a separate company from Time Warner Cable. The AT&T -- Time
Warner deal has been criticized by media watchdogs and even
President Trump on the grounds that the media space is already too
consolidated. The Justice Department is handling the antitrust
review.
An AT&T spokesman said, "We are pleased to have resolved
this matter to the satisfaction of all parties."
--Brent Kendall contributed to this article.
Write to Joe Flint at joe.flint@wsj.com
(END) Dow Jones Newswires
March 23, 2017 20:02 ET (00:02 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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