AT&T/DirecTV give in to government demands in collusion lawsuit settlement
Customers lost when pay-TV companies illegally shared information, DOJ says.
DirecTV and its owner, AT&T, have promised the US Department of Justice that they will not illegally share information with rival pay-TV providers in order to keep the price of TV channels down.
The DOJ sued DirecTV and AT&T in November 2016, saying the satellite-TV company colluded with competitors during contentious negotiations to broadcast Los Angeles Dodgers games. AT&T initially said that it looked forward to defending itself in court. But yesterday, the company agreed to a settlement “without trial or adjudication of any issue of fact or law.”
The proposed settlement, pending court approval, “will obtain all of the relief sought by the department in its lawsuit,” the DOJ said in its announcement.
The DOJ said:
When DirecTV and AT&T negotiate with providers of video programming, including negotiations to telecast the Dodgers Channel, they will not illegally share competitively-sensitive information with their rivals. The settlement also requires the companies to monitor certain communications their programming executives have with their rivals, and to implement antitrust training and compliance programs.
Many Dodgers fans have been unable to watch their favorite baseball team because TV providers haven’t paid for the right to carry the SportsNet LA channel operated by the Dodgers and Time Warner Cable. The DOJ alleged that DirecTV was the ringleader in a scheme with cable companies Cox and Charter, in which “DirecTV and each of these competitors agreed to and did exchange non-public information about their companies’ ongoing negotiations to telecast the Dodgers Channel, as well as their companies’ future plans to carry—or not carry—the channel.”
DOJ: Settlement promotes pay-TV competition
There was little risk of TV customers switching to a different cable or satellite company in order to watch Dodgers games when TV providers knew their rivals wouldn’t pay the price demanded by SportsNet LA, the DOJ said. According to the DOJ, the TV providers shared information “to obtain bargaining leverage and to reduce the risk that they would lose subscribers if they decided not to carry the channel but a competitor chose to do so.” Dodgers channel negotiations began in January 2014; games are now available on Charter, which purchased Time Warner Cable last year.
The settlement does not guarantee an end to channel carriage disputes, but AT&T and DirecTV agreed to follow the law in negotiations.
“When competitors e-mail, text, or otherwise share confidential and strategically sensitive information with each other to avoid competing, consumers lose,” acting Assistant Attorney General Brent Snyder said. This “settlement promotes competition among pay-television providers and prevents AT&T and DirecTV from engaging in illegal conduct that thwarts the competitive process.”
We asked AT&T for comment and will provide an update if we get one. Last year, AT&T blamed SportsNet LA for charging inflated prices. The Dodgers Channel’s asking price was reportedly about $5 a month per subscriber regardless of how many people watch the games. The price of regional sports networks has helped drive up the overall prices paid by cable TV customers throughout the US.