By Edvard Pettersson, Bloomberg News
DirecTV settled a U.S. antitrust lawsuit that accused the satellite-television provider of colluding with its competitors during a 2014 standoff with Time Warner Cable Inc. over a channel devoted to the Los Angeles Dodgers.
DirecTV won’t share competitively sensitive information with rivals and agreed to a compliance program to make sure it abides by the settlement, according to an agreement filed Thursday in federal court in Los Angeles.
“When competitors email, text, or otherwise share confidential and strategically sensitive information with each other to avoid competing, consumers lose,” Acting Assistant Attorney General Brent Snyder said in a statement.
The Justice Department alleged DirecTV was the ringleader of a conspiracy among Los Angeles-area distributors to share negotiating information so that Time Warner Cable wouldn’t gain leverage by getting one distributor to sign up before the others. The alleged scheme left about 70 percent of pay-TV subscribers in Los Angeles without access to the Dodgers baseball channel.
The settlement removes a potential obstacle to government clearance of the $85.4-billion merger between DirecTV’s parent company, AT&T Inc., and Time Warner Inc., which is being reviewed the Justice Department’s antitrust division. President Donald Trump said during his campaign last year that the deal was “an example of the power structure I’m fighting.” Critics have argued that a beefed-up AT&T could undermine competition by charging rivals more for Time Warner content like HBO and CNN.
“We are pleased to have resolved this matter to the satisfaction of all parties,” AT&T said in a statement on the antitrust settlement.
DirecTV argued in its bid to get the lawsuit thrown out that the satellite-TV provider had refused to pay top dollar for Time Warner Cable’s Dodgers channel because it had been “burned” before by overpaying to air Los Angeles Lakers basketball games.
The company maintained the steep cost of the SportsNet LA is the reason why it isn’t widely distributed. Time Warner Cable set a dramatically higher price for the Dodgers channel — about $5 per subscriber — because it paid an “extravagant” price for local broadcast rights: $8.3 billion over 25 years, according to DirecTV.
SportsNet LA is owned jointly by the Dodgers and Time Warner Cable, which was acquired last year by Charter Communications Inc.
The settlement will need to be approved by the federal judge in Los Angeles overseeing the lawsuit.
The settlement doesn’t and isn’t intended to compel any distributor to reach an agreement to carry any particular video programming, including the Dodgers Channel, the Justice Department said in court filings.
“Rather, the final judgment 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 that competitive process and makes carriage on competitive terms less likely,” the government said.
The case is U.S. v. DirecTV, 16-CV-08150, U.S. District Court, Central District of California (Los Angeles).
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